STOCK EXCHANGE

CONTENT

1. Meaning of Speculation
2. Types of Speculators
3. Bodies that Can Assess the Capital Market
4. Second Tier Security Market
5. Operating Regulations
6. Primary and Secondary Market/First Tier and Second Tier

Meaning of Speculation

Speculation is the purchase of securities by speculators in the hope that its price will rise and that profitable resale will thereby be possible. Speculators take advantage of price fluctuation of prices, buy shares with the intention of reselling them when the prices rise.

Types of Speculators

1. Bull: A bull is a speculator who buys securities with the intention of reselling them at a higher price before the payment on the securities is due. He buys securities and waits for a time of general rise in price of securities.

2. Bear: A speculator who expects prices of securities to fall before delivery dates and thus sells out to make good profit. He sells to people the securities he does not yet possess with the speculation that the price of the securities will fall before the delivery date so that he can acquire the securities and sell at a profit margin.