Speculative names are binary in character. A clinical-stage biotech, an exploration miner, or a pre-revenue technology company has a value that depends on an event, so the price behaves like an option: long quiet periods punctuated by a move that reprices the whole company.
They fund themselves by issuing stock, so dilution is continuous, and cash runway is the number that matters most. Position sizing, not analysis, is what keeps these survivable.
Example: a biotech at $6 with $200M of cash and a phase 3 readout due. The market implies roughly a 30% chance of success. On failure the stock trades toward cash value near $2.20; on success it triples. Neither outcome is a 20% move.
Related: micro-cap, position-sizing, risk-per-trade