A) Bulls, Bears and Stags

The buying of something cheap at one time for the purpose of selling the same thing dearer at another time is speculation. Whilst in a sense all deals are speculations, the term is generally limited to circumstances where profit is made because the same thing has different prices at different times. Anyone who does so is said to be a speculator. A speculator on the stock exchange is a person who backs the judgments he makes about likely developments by buying or selling shares. The chief varieties of speculators on the stock exchange are known as "bulls", "bears" and "stags".

A speculator may buy shares, for which he cannot or does not wish to pay at the time, in the hope that "during the account", i.e. before the date of payment, the price will have risen and he can then sell them at a profit. A buyer who buys like this in the hope of a rise in prices is a "bull".

Bears are pessimistic speculators who expect a fall in share prices. They therefore sell any shares they have now, and even shares they do not have, because, if prices fall as expected, the shares will be available in a few hours or a few days at lower prices than at present.

In both cases the success of the speculation depends both on a correct forecast of the security price movement and on a sufficiently long time interval before payment or delivery must be made. It quite often happens that "bulls" or "bears" are wrong in their anticipations, or that they are convinced that by holding out even beyond settlement day they could still make a profit.

To meet this case a delaying procedure has been evolved which allows the speculators to let their bargains stand over until the following settlement day. This is known as "contango" or "continuation". Arrangements for such "carry-overs" are made on the first day of the new account which is known as "Contango Day".

Stags are speculators who operate in the "new issues" market rather than on the Stock Exchange, although they must use the Stock Exchange before they can realize any profit. What a stag does is to apply for shares that are just being issued and are likely to be oversubscribed. He does not want to keep the shares, or invest in the company that is issuing them, but simply to make a profit out of the issue. The stag expects that the stock, upon issue, will quickly rise to a premium in the market, and he will then sell his stock at a profit. The activities of "stags" have been greatly reduced in recent years.

Words you may need:

bull n «бык», покупатель ценной бумаги, играющий на повышение

bear n «медведь», продавец ценной бумаги, играющий на понижение

stag n спекулянт, покупающий новые ценные бумаги при объявлении подписки в надежде продать их с прибылью после начала торговли на вторичном рынке

speculation n спекуляция, купля-продажа ценных бумаг для получения прибыли

speculator n лицо, занимающееся спекуляцией

account n операционный период на фондовой бирже

anticipation n ожидание

contango n отсрочка расчета по сделке

carry-over n отсрочка сделки

new issue новый выпуск (ценных бумаг)

shares that... are likely to be over-subscribed акции, подписка на которые, по ожиданиям, превысит предложение

premium n премия (сумма, на которую цена, заплаченная за акцию, превышает ее номинальную стоимость)