Question

Disadvantages of the speculation in Malaysia. (at least 200 words)

Answer 1

Disadvantages of speculation in Malaysia are as follows-

A. An inefficient form of market which is not a reflective of true form of volatility and which is mostly driven by random events in Malaysia.

B. there is also a cost of speculation involved and if it does not leads to profit, then it would be leading to to an additional cost.

C. Speculation can be injurious to the overall portfolio because if they show the movement on the opposite direction, it would be lethal for the portfolio.

D. Lack of presence of appropriate derivatives instruments available in the Malaysian markets also makes it difficult to speculate in Malaysian market.

E.there are not enough leverages provided by the brokers to the different clients so, speculation is difficult.