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40-762: The Harsola Vanik Samaj is also originated from the Harsol and later they expanded to other districts of Gujarat and nearby states of Maharashtra and Madhya Pradesh. Harsola Vanik ( हरसोला वणिक ) is a Hindu sub-group of the Vanik caste. They are strictly vegetarian in diet and follow Vaishnavism . Most of Harsola Vaishnavas are the followers of Vallabhacharya and ensue Pushtimarg . Surnames of people associated with Harsola Vanik Samaj can be Harsola, Shah, Mehta, Saraf, Shroff, Doshi, Wani, Modi, Gandhi, Desai etc. 23°22′N 73°01′E  /  23.36°N 73.02°E  / 23.36; 73.02 This article about

80-497: A few have converted to Sikhism , Islam , Christianity and Buddhism . In Gujarat, Hindu Banias are largely Vaishnavas and are followers of Vallabhacharya . It is hypothesized by historians that the Vaishnav Vaniyas of Gujarat are the descendants of the now-extinct Buddhist merchants who were formerly present in the region. Banias are composed of caste in the mercantile and business fields, which have delineated

120-458: A firm's off-balance-sheet exposures" including "environmental or social liabilities present in a market or company but not explicitly accounted for in traditional numeric valuation or mainstream investor analysis". Hence, they make the prices better reflect the true quality of operation of the firms. Shorting may act as a "canary in a coal mine" to stop unsustainable practices earlier and thus reduce damages and form market bubbles. Auctions are

160-651: A location in Sabarkantha district , Gujarat , India is a stub . You can help Misplaced Pages by expanding it . Bania (caste) Bania (also spelled Baniya , Banija , Banya , Vaniya , Vani , Vania and Vanya ) is a mercantile caste mainly from the Indian states of Gujarat and Rajasthan , with strong diasporic communities in Uttar Pradesh , Madhya Pradesh , West Bengal , Maharashtra (mainly Mumbai ) and other northern states. Traditionally,

200-434: A method of squeezing out speculators from a transaction, but they may have their own perverse effects by the winner's curse . The winner's curse is, however, not very significant to markets with high liquidity for both buyers and sellers, as the auction for selling the product and the auction for buying the product occur simultaneously, and the two prices are separated only by a relatively small spread. That mechanism prevents

240-658: A number of attempts over the years to introduce regulations and restrictions to try to limit or reduce the impact of speculators. States often enact such financial regulation in response to a crisis. Note for example the Bubble Act 1720 , which the British government passed at the height of the South Sea Bubble to try to stop speculation in such schemes. It remained in place for over a hundred years until repealed in 1825. The Glass–Steagall Act passed in 1933 during

280-541: A smaller extent periodically included commodity futures and foreign currencies (see Chua and Woodward, 1983). His fund was profitable almost every year, averaging 13% per year, even during the Great Depression , thanks to very modern investment strategies, which included inter-market diversification (it invested in stocks, commodities and currencies) as well as shorting (selling borrowed stocks or futures to profit from falling prices), which Keynes advocated among

320-559: A steady stream of enterprise . But the situation is serious when enterprise becomes the bubble on a whirlpool of speculation. (1936:159)" Keynes himself enjoyed speculation to the fullest, running an early precursor of a hedge fund . As the Bursar of the Cambridge University King's College, he managed two investment funds, one of which, called Chest Fund, invested not only in the then 'emerging' market US stocks, but to

360-607: Is composed of several sub-castes including the Agarwal , Khandelwal , Maheshwari , Oswal , Porwad and Shrimali Baniyas, among others. Traditionally (dating to at least the 15th century), the Gujarati Baniyas had 84 divisions (as did Gujarati Brahmins), although many were simply formulaic. Subcastes are also divided into Visa and Dasa divisions, which are also centuries old, and prohibit intermarriage. Most Banias are followers of either Hinduism or Jainism , but

400-411: Is concerned that the price might fall too far by harvest time. By selling his crop in advance at a fixed price to a speculator, he can now hedge the price risk and plant the corn. Thus, speculators can increase production through their willingness to take on risk (not at the loss of profit). Speculative hedge funds that do fundamental analysis "are far more likely than other investors to try to identify

440-463: Is simply a higher-risk form of investment. Others define speculation more narrowly as positions not characterized as hedging. The U.S. Commodity Futures Trading Commission defines a speculator as "a trader who does not hedge, but who trades with the objective of achieving profits through the successful anticipation of price movements". The agency emphasizes that speculators serve important market functions, but defines excessive speculation as harmful to

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480-492: The Commodity Futures Trading Commission (CFTC) has proposed regulations aimed at limiting speculation in futures markets by instituting position limits. The CFTC offers three basic elements for their regulatory framework: "the size (or levels) of the limits themselves; the exemptions from the limits (for example, hedged positions) and; the policy on aggregating accounts for purposes of applying

520-536: The Great Depression in the United States provides another example; most of the Glass-Steagall provisions were repealed during the 1980s and 1990s. The Onion Futures Act bans the trading of futures contracts on onions in the United States, after speculators successfully cornered the market in the mid-1950s; it remains in effect as of 2021 . The Soviet Union regarded any form of private trade with

560-539: The World Food Programme . In 1935, the Indian government passed a law allowing the government partial restriction and direct control of food production (Defence of India Act, 1935). It included the ability to restrict or ban the trading in derivatives on food commodities. After achieving independence in 1947, India in the 1950s continued to struggle with feeding its population and the government increasingly restricted trading in food commodities. Just at

600-495: The Baniya identity. The term baniya has historically been applied to various mercantile communities who belong to diverse castes. Baniyas are vegetarians, and some groups have greater restrictions on the foods that can be consumed. They also take care not to kill insects when preparing and eating food. Baniyas were known to be hard working and frugal. Only minimum expenses would be made on clothing, food, and furniture. During

640-491: The Jain and Hindu Vaishnavs' beliefs, rituals, prayers, and ceremonies being often very similar. Pushtimarg Vaishnavs would perform emotional seva to Krishna , and Jains would be austere and follow the Jain vows. Lakshmi Puja was performed by Baniyas, as it Lakshmi would be considered to bestow wealth and welfare on the family. According to Basu, the culture of Gujarati Baniyas is viewed ambivalently by outsiders, stating "on

680-492: The accumulation of many small profits. These include short-weighing, adulteration of products, and regular undervaluation of a debt repayments. They were also known for being well spoken when speaking to others, but were not confrontatious. They were very secretive about their business accounts, and would use secret scripts or illegible handwriting. Often two sets of account books were kept, one for showing officials if needed, and one only for family. Business dealings were kept within

720-518: The appearance of the stock ticker machine in 1867, which removed the need for traders to be physically present on the stock exchange floor, stock speculation underwent a dramatic expansion through the end of the 1920s. The number of shareholders increased, perhaps, from 4.4 million in 1900 to 26 million in 1932. The view of what distinguishes investment from speculation and speculation from excessive speculation varies widely among pundits, legislators and academics. Some sources note that speculation

760-417: The benefits of speculation: Let's consider some of the principles that explain the causes of shortages and surpluses and the role of speculators. When a harvest is too small to satisfy consumption at its normal rate, speculators come in, hoping to profit from the scarcity by buying. Their purchases raise the price, thereby checking consumption so that the smaller supply will last longer. Producers encouraged by

800-408: The bubble is followed by a precipitous collapse fueled by the same phenomenon. Speculative bubbles are essentially social epidemics whose contagion is mediated by the structure of the market. Some economists link asset price movements within a bubble to fundamental economic factors such as cash flows and discount rates. In 1936, John Maynard Keynes wrote: "Speculators may do no harm as bubbles on

840-474: The day, Baniya boys were sent to schools called patshala s where they would learn business skills and habits. They learned how to read and write, as well as in secret merchant scripts that were hidden from non-Baniyas. They also learned ciphers , accounting , and arithmetic . The correctness of mathematical calculations was extremely important to Baniyas, and they learnt various methods and tricks so they could perform advanced mental arithmetic. A mercantile ethos

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880-406: The economy is price discovery . On the other hand, as more speculators participate in a market, underlying real demand and supply can diminish compared to trading volume, and prices may become distorted. Speculators perform a risk-bearing role that can be beneficial to society. For example, a farmer might consider planting corn on unused farmland . However, he might not want to do so because he

920-516: The family, and in cases of dispute other Baniyas would arbitrate in order to keep business deals secret from non-Baniyas. Their preference for compromises instead of confrontations often led non-Baniyas to think of them as cowardly. In order to prepare for further business success, Baniyas also had to have high levels of information access. They had messengers, intelligence networks, and postal services in order to make sure that they knew about any important knowledge as early as possible. Such information

960-423: The high price further lessen the shortage by growing or importing to reduce the shortage. On the other side, when the price is higher than the speculators think the facts warrant, they sell. This reduces prices, encouraging consumption and exports and helping to reduce the surplus. Another service provided by speculators to a market is that by risking their own capital in the hope of profit, they add liquidity to

1000-950: The hope that it will become more valuable shortly. It can also refer to short sales in which the speculator hopes for a decline in value. Many speculators pay little attention to the fundamental value of a security and instead focus purely on price movements. In principle, speculation can involve any tradable good or financial instrument . Speculators are particularly common in the markets for stocks , bonds , commodity futures , currencies , cryptocurrency , fine art , collectibles , real estate , and financial derivatives . Speculators play one of four primary roles in financial markets, along with hedgers , who engage in transactions to offset some other pre-existing risk, arbitrageurs who seek to profit from situations where fungible instruments trade at different prices in different market segments, and investors who seek profit through long-term ownership of an instrument's underlying attributes. With

1040-581: The intent of gaining profit as speculation ( Russian : спекуляция ) and a criminal offense and punished speculators accordingly with fines, imprisonment, confiscation and/or corrective labor . Speculation was specifically defined in article 154 of the Penal Code of the USSR. Some nations have moved to limit foreign ownership of cropland to ensure that food is available for local consumption, while others have leased food land abroad despite receiving aid from

1080-589: The limits". The proposed position limits would apply to 28 physical commodities traded in various exchanges across the US. Another part of the Dodd-Frank Act established the Volcker Rule , which deals with speculative investments of banks that do not benefit their customers. Passed on 21 January 2010, it states that those investments played a key role in the 2007–2008 financial crisis . Proposals made in

1120-429: The liquidity in a market, and therefore promote an efficient market . This efficiency is difficult to achieve without speculators. Speculators take information and speculate on how it affects prices, producers and consumers, who may want to hedge their risks, needing counterparties if they could find each other without markets it certainly would happen as it would be cheaper. A very beneficial by-product of speculation for

1160-602: The main occupations of the community are merchants , bankers , money-lenders , and (in modern times) owners of commercial enterprises . The Hindi term baniyā is derived from Sanskrit vaṇija ("trader"), whereas the Marwari bā̃ṇyõ and Gujarati vāṇiyo are derived from Sanskrit vāṇija ("trader"). The community is also known by the term "vanik". In Bengal the term Bania is a functional catch-all for moneylenders, indigenously developed bankers, readers of grocery items and spices, irrespective of caste. The community

1200-432: The market and make it easier or even possible for others to offset risk , including those who may be classified as hedgers and arbitrageurs. If any market, such as pork bellies , had no speculators, only producers (hog farmers) and consumers (butchers, etc.) would participate. With fewer players in the market, there would be a larger spread between the current bid and the asking price of pork bellies. Any new entrant in

1240-421: The market who wanted to trade pork bellies would be forced to accept this illiquid market and might trade at market prices with large bid–ask spreads or even face difficulty finding a co-party to buy or sell to. By contrast, a commodity speculator may profit from the difference in the spread and, in competition with other speculators, reduce the spread. Some schools of thought argue that speculators increase

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1280-508: The one hand, it is associated negatively with usury and commercial calculation, and on the other, it carries positive connotations of Jaina and Vaiṣṇava religious traditions that place special emphasis upon values of vegetarianism, nonviolence ( ahiṃsā ), and purity". They described as belonging to the Vaishya varna. Speculation In finance , speculation is the purchase of an asset (a commodity , goods , or real estate ) with

1320-520: The principles of successful investment in his 1933 report: "a balanced investment position... and if possible, opposed risks". It is controversial whether the presence of speculators increases or decreases short-term volatility in a market. Their provision of capital and information may help stabilize prices closer to their true values. On the other hand, crowd behavior and positive feedback loops in market participants may also increase volatility. The economic disadvantages of speculation have resulted in

1360-670: The proper functioning of futures markets. According to Benjamin Graham in The Intelligent Investor , the prototypical defensive investor is "one interested chiefly in safety plus freedom from bother". He adds that "some speculation is necessary and unavoidable, for, in many common-stock situations, there are substantial possibilities of both profit and loss, and the risks therein must be assumed by someone." Thus, many long-term investors, even those who buy and hold for decades, may be classified as speculators, excepting only

1400-453: The rare few who are primarily motivated by income or safety of principal and not eventually selling at a profit. Nicholas Kaldor has long argued for the price-stabilizing role of speculators, who tend to even out "price-fluctuations due to changes in the conditions of demand or supply", by possessing "better than average foresight". This view was later echoed by the speculator Victor Niederhoffer , in "The Speculator as Hero", who describes

1440-659: The time the Forward Markets Commission was established in 1953, the government felt that derivative markets increased speculation, which led to increased food costs and price instabilities. In 1953 it finally prohibited options- and futures-trading altogether. The restrictions were not lifted until the 1980s. In the United States , following passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,

1480-506: The winner's curse phenomenon from causing mispricing to any degree greater than the spread. Speculation is often associated with economic bubbles . A bubble occurs when the price for an asset exceeds its intrinsic value by a significant margin, although not all bubbles occur due to speculation. Speculative bubbles are characterized by rapid market expansion driven by word-of-mouth feedback loops , as initial rises in asset price attract new buyers and generate further inflation. The growth of

1520-448: Was also instilled in the boys, as they learned the chief aim of life was to acquire wealth and only profitable transactions were worthwhile. After school hours, boys would spend time in the family shop and learn the business. After education was complete boys would try to start their own businesses and if successful, would be allowed to manage the family business. When Baniyas made transactions, they often had dubious qualities that allowed

1560-563: Was also tied to socioreligious conduct, as maintaining marital relations within the community, having a strong patriarch, and adherence to religious principles were all highly valued. Wealthy Baniyas only spent large sums of money for specific purposes: hosting feasts, buying jewellery (mainly for women), construction of havelis , and the most honourable being donating to religious causes such as temples or religious festivals. Such displays of wealth allowed Baniyas to show their status and high honour. Baniyas historically are very religious, with

1600-410: Was often used in speculation in futures exchanges , which in turn sometimes turned into gambling. Honour was very important to Baniyas, which they called abru . Their honour was tied to their credit worthiness, which were valued higher than their lives. A bankrupt Baniya was stigmatised, and those who were caught to be dishonest with another Baniya were boycotted, bankrupted, and stigmatised. Honour

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