Speculation is making a guess or forming a theory about something without having all the facts. When scientists first discovered dinosaur fossils, there was lots of speculation about what colors dinosaurs might have been, since fossils don't preserve color. They had to speculate based on clues like bone structure and what modern reptiles look like.

You might speculate about why your friend seemed upset at lunch, or speculate about what's inside a wrapped birthday present. The word suggests you're thinking carefully and reasoning things out with the information you have, even though you're working with incomplete information.

In the financial world, speculation means investing money in something risky, hoping its value will increase. A speculator might buy stocks in a new company or purchase land they think will become valuable. They're taking a calculated risk based on what they think might happen, without any guarantees.

When someone says “that's just speculation,” they mean the idea might be interesting but isn't proven yet. Scientists value evidence over speculation, though speculation often leads them to ask the right questions. The noun form is speculation, and someone who speculates is called a speculator.