Speculation is not always indistinguishable from hedging. If you have $100 in fixed rate debt, then a $100 fixed floating swap can be hedging. A $1,000 swap i

Speculation is not always indistinguishable from hedging. If you have $100 in fixed rate debt, then a $100 fixed floating swap can be hedging. A $1,000 swap is speculating. Speculation sometimes has negative consequences for the economy. For example a few years ago oil prices were driven higher than they would otherwise be by speculation and this reduced GDP.