Speculative Capital Definition
Speculative Capital refers to funds used for the sole purpose of speculation. Speculation is a financial action that does not promise the return on the amount involved.
It typically means the lending of money or the purchase of assets, equity or debt that have low margin of safety or a significant risk of the loss of the principal. Therefore speculative capital is often associated with extreme volatility and a high probability of loss. Most speculators have short-term investment horizons and use high degrees of leverage.