What Is The Speculation Business Means?


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Nouman Umar Profile
Nouman Umar answered
A speculation business means any business in which a contract for the purchase and sale of any commodity including stock and shares are periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity but does not include a business in which a contract in respect of raw materials or merchandise is entered into by a person in the course of a manufacturing or mercantile business to guard against loss through future price fluctuations for the purposes of fulfilling the person's other contracts for the actual delivery of the goods to be manufactured or merchandise to be sold.

A contract in respect of the stocks and shares is entered into by a dealer or investor to guard against loss in the person's holding of stocks and shares through price fluctuations. A contract is entered into by a member of a forward market or stock exchange in the course of any transaction to guard against any loss which may arise in the ordinary course of the person's business as such member. The amount received or earned from this income is subject to taxable and there is a lot of risk associated with the speculation business especially in the stock exchange market.

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