Lesson Plan

• Describe why speculators buy and sell foreign currencies.
• Explain the step‑by‑step process of a speculative transaction.
• Calculate profit or loss from a simple speculation example.
• Analyse how speculative activity can affect short‑term exchange‑rate movements.
• Identify the main risks associated with currency speculation.

• Projector and screen for slides/diagrams
• Whiteboard and markers
• Handout with profit‑calculation examples and scenario table
• Printed supply‑and‑demand diagram
• Calculators (or computers) for each student
• Short video clip illustrating a real‑world speculation case (optional)

Begin with a quick poll: who has heard of traders making money from changes in currency values? Connect this to the previous lesson on foreign‑exchange markets and explain that today’s focus is on speculation, where profit is sought from anticipated rate movements. Students will know they can identify reasons speculators trade, work through a simple profit example, and recognise the impact on exchange rates.

1. Do‑now (5'): Students answer an exit‑ticket question on how exchange rates are determined.
2. Mini‑lecture (10'): Define speculation, differentiate it from trade and hedging, and present the main reasons speculators trade (bullet list).
3. Guided activity (12'): Walk through the step‑by‑step speculation process; pupils complete a worksheet outlining each stage.
4. Profit calculation practice (8'): Using a given scenario, students calculate profit or loss with calculators and discuss answers.
5. Impact analysis (10'): In groups, students use the supply‑and‑demand diagram to predict how large speculative buying or selling shifts the curve; groups share findings.
6. Risk identification (5'): Quick brainstorm of speculation risks; teacher adds key points.
7. Check for understanding (5'): Kahoot quiz or rapid‑fire questions to confirm grasp of concepts.

Summarise that speculation hinges on expectations of exchange‑rate changes, can move rates in the short term, and carries significant risks. For the exit ticket, students write one reason speculators trade and one associated risk. Homework: complete a worksheet calculating profits for two additional scenarios.