Although effectively a sophisticated form of gambling, speculation is recognized in business as a necessary constituent of a healthy free-enterprise economy. In the commodity market, particularly, the willingness of dealers to speculate on future prices can serve to maintain a fairly stable price level. The speculator sells forward at a price acceptable to the purchaser and with no certain knowledge of the price he will have to pay for the commodity when the time comes to fulfil the contract. If supplies are plentiful and prices low, he stands to make a more than adequate profit, but if supplies are scarce, due perhaps to a poor harvest, he may be forced to buy in at prices far above those at which he has contracted to sell and may thereby incur considerable losses. Dealings in more than one commodity can provide a safeguard, as gains in one may be able to compensate for losses in another. Because of the risks involved in such dealings, speculation nowadays is principally in options.
Reference: The Penguin Business Dictionary, 3rd edt.