Pakistan study notes for Matric, Intermediate, B.A, B.COM BSC, M.A, BCS. Free Pakistani Urdu educational school, colleges and University notes.

SPECULATION AT STOCK EXCHANGE

SPECULATION AT STOCK EXCHANGE

Not only spot business is done on stock exchanges but also futures. In spot business, the stocks are transacted for immediate delivery and actual transfer of shares takes place. But in future/ forward business, transactions are made for a point of time in future. No actual delivery is made. Once the desired future point of time arrives.

Only the difference resulting from the future price and actual price is given to settle the transaction. Those speculators who purchase in the hope that the price of stock will go up are known as bulls.

Those speculators who sell for fear that the price will go down are known as bears. Bulls and bears make huge profits when they go right in their predictions.

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