A:

First of all, let's remember that bears are sluggish and bulls spirited and burly. The terms are used to describe general actions and attitudes, or sentiment, either of an individual (bear and bull) or the market. A bear market refers to a decline in prices, usually for a few months, in a single security or asset, group of securities or the securities market as a whole. A bull market is when prices are rising.

The actual origins of these expressions are unclear. Here are two of the most frequent explanations given:

  1. The terms "bear" and "bull" are thought to derive from the way in which each animal attacks its opponents. That is, a bull will thrust its horns up into the air, while a bear will swipe down. These actions were then related metaphorically to the movement of a market: if the trend was up, it was considered a bull market; if the trend was down, it was a bear market.
  2. Historically, the middlemen in the sale of bearskins would sell skins they had yet to receive. As such, they would speculate on the future purchase price of these skins from the trappers, hoping they would drop. The trappers would profit from a spread—the difference between the cost price and the selling price. These middlemen became known as "bears," short for bearskin jobbers, and the term stuck for describing a downturn in the market. Conversely, because bears and bulls were widely considered to be opposites due to the once-popular blood sport of bull-and-bear fights, the term bull stands as the opposite of bears.

    (For further reading, see Surviving Bear Country and Digging Deeper Into Bull And Bear Markets, as well as The Bulls, The Bears and The Farm.)

RELATED FAQS
  1. Are we in a bull market or a bear market?

    A bull market is represented by a rising price trend, and a bear market is indicated by a falling price trend. Given this ... Read Answer >>
  2. What are the signs of a bear market rally?

    Read about some of the signs of a bear market rally, an unpredictable bull movement that takes place in the middle of a stronger ... Read Answer >>
  3. What is a common strategy traders implement when using the Elder-Ray Index?

    Read about the important buying and selling conditions that are recommended by Dr. Alexander Elder when using his Elder-Ray ... Read Answer >>
Related Articles
  1. Investing

    How To Adjust Your Portfolio In A Bear Or Bull Market

    While investors shouldn’t feel compelled to change their portfolios radically overnight in reaction to the market's daily moves, small adjustments in the face of a bull or bear market could be ...
  2. Investing

    What Does the Bull Market Anniversary Mean to You?

    Bull and bear markets shouldn't really matter to long-term investors.
  3. Investing

    Bear Funds: A Bullish Stance On Bad Times

    Even if the market is in a decline your portfolio doesn't have to be.
  4. Trading

    The Elder-Ray Indicator: Seeing Into The Market

    Elder-ray helps determine the strength of competing groups of bulls and bears so you know when to buy and when to short.
  5. Trading

    Triple Screen Trading System - Part 4

    How can a trader use the Elder-Ray oscillator as the second screen of this system? Find out here.
  6. Insights

    How Bull Markets Past and Present Stack Up

    Looking back at the history of bull markets can give some context on where we currently stand.
  7. Investing

    4 Small-Cap Core ETFs for Bull and Bear Markets (DGRS, IJR)

    Learn about the state of U.S. small-cap stocks and four ETFs to consider for returns during a bull or bear market in small-cap stocks.
  8. Investing

    Bull Market

    A financial market with rising asset prices fueled by investors’ optimism, confidence and expectations.
  9. Financial Advisor

    Preparing Your Clients for the Next Bear Market

    It has been almost six years since the last bear market, so it might be time for advisors to start preparing their clients for the inevitable downturn.
  10. Trading

    Profiting In Bear And Bull Markets

    There are many ways to profit in both bear and bull markets. The key to success is using the tools for each market to their full advantage.
RELATED TERMS
  1. Bull Position

    A long position in a financial security, such as a stock in the ...
  2. Bull

    An investor who thinks the market, a specific security or an ...
  3. Bear Trap

    A false signal that the rising trend of a stock or index has ...
  4. Bear Fund

    A mutual fund designed to provide higher returns when the market ...
  5. Bear Closing

    Purchasing a security, currency, or commodity in order to close ...
  6. Bear Market

    A market condition in which the prices of securities are falling, ...
Hot Definitions
  1. Payback Period

    The length of time required to recover the cost of an investment. The payback period of a given investment or project is ...
  2. Collateral Value

    The estimated fair market value of an asset that is being used as loan collateral. Collateral value is determined by appraisal ...
  3. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  4. Current Account

    The difference between a nation’s savings and its investment. The current account is defined as the sum of goods and services ...
  5. Liability

    Liabilities are defined as a company's legal debts or obligations that arise during the course of business operations.
  6. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
Trading Center