What is a speculative stock?

A speculative stock is a high-risk stock that offers the potential for high returns.

Speculative stocks are often associated with companies that are new, have uncertain prospects, or are undergoing major changes.

Speculative stocks appeal to short-term traders due to their low share price and greater volatility compared to traditional blue-chip stocks.

Speculative stocks tend to be clustered into sectors or types: penny stocks, emerging market stocks, rare materials stocks, pharmaceutical stocks, etc.