This paper develops a model of speculative trading to study the properties of equilibrium asset valuation, price volatility and trading volume. We consider a large economy with overlapping generations of risk-averse investors who are assumed to have diverse expectations as in Miller (1977) and Varian (1985). We demonstrate how asset valuation can deviate from the rational expectation equilibrium, and observe the effect of price amplification. It is also shown that trading volume is positively related to the directions of price changes. Moreover, we study how asset price volatility and trading volume are influenced by expectation structures and the amount of fund available for investments.

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