There are different types of players in the commodity tips and market depending on their needs. Broadly speaking, you’ll come across three types of participants in the market. These are:
The dealers in the stock exchange who indulge in speculation are called speculators.
The investors who participate in the market to manage their spot market price risk are termed as hedgers.
The traders who buy and sell to make money on price variations in different markets are called arbitrators.
Coming to the speculation, Speculation is an activity by virtue of which, the stock exchange members transact securities on the stock exchange with a view to make profits to anticipated rise or fall in the price of securities.
There are different types of speculators in the market:
A broker acts an as intermediary between stock exchange and investors. He is a commission agent who carries out trade on behalf of the non-members on the stock exchange.
A jobber is an intermediary between the members of the stock exchange and the stock brokers. He doesn’t deals with the public directly. A jobber is responsible to buy securities from the members of the stock exchange and sell them to the brokers.
A bull speculator is often referred to as “TEJIWALA”. He is the one who expects the future rise in the price of securities via option tips and buys the securities to sell them at a high price in future. He is referred to as a bull because his activities resemble to a bull.
A bear speculator is often referred to as “MANDIWALA”. He is the one who expects the future fall in the price of securities and makes an agreement to sell the securities at a future date at the present market rates. He is referred to as a bear because his activities resemble to a bear.
He is much like a bull speculator who operates in new issues of the market. He is the one who applies for a large number of shares in the issue market only by paying application money and the allotment money. He makes profits by selling the allotted securities at premium. These are cautious investors.
- Lame duck:
A bear speculator becomes a lame duck when the price of the securities doesn’t go down as expected by him and he’s unable to deliver the securities on the delivery date.