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Speculating can be likened to “financial gambling.” Speculating means that you’re making an educated guess about the direction of a particular asset’s price move. You’re looking for big price moves to generate a large profit as quickly as possible, but you also understand that it can be very risky and volatile. Your appetite for greater potential profit coupled with increased risk is similar to the trader (see the previous section), but your time frame is different. Speculating can be either short term or long term.

Your gold and silver venue of choice could be stocks, but more likely, the stocks would be of mining companies (called junior mining stocks or exploratory companies) that are typically smaller companies with greater price potential (see Chapter 7). Speculating is also done in leveraged and inverse ETFs (covered in Chapter 11).

For shorter-term speculating, my main preference is long-dated options on stocks, futures, or ETFs. If you think that a stock, ETF, or futures contract is going up in the short term, then use call options. If you think their price will decline or crash in the short term, then consider put options. Both types of options are covered in Chapter 13.

The year 2020 was a great speculating year. My clients and I made plenty of money with call options on gold and silver vehicles while we also bought put options on stocks, and both produced fantastic gains.

For more information on successful approaches to aggressive speculating in stocks and ETFs and for details on advanced options strategies, consider my book High-Level Investing For Dummies (Wiley).