Where did the bull and bear market get their names?

By Investopedia Staff AAA
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 period of 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. Why is the Directional Movement Index (DMI) important for traders and analysts?

    Read about the concepts behind J. Welles Wilder Jr.'s directional movement index (DMI), a technical indicator designed to ...
  2. How do you trade put options on E*TRADE?

    Learn all about put option trading at E*TRADE. Explore margin accounts and become familiar with the different types of option ...
  3. How do you trade put options on Ameritrade?

    Learn about option trading with TD Ameritrade. Explore the different types of options and their possible impacts on the investors ...
  4. How can retirees protect their wealth in a bear market?

    Look at some helpful hints about how to protect your retirement nest egg when the stock market is underperforming or the ...
RELATED TERMS
  1. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  2. Bulldog Market

    A nickname for the foreign bond market of the United Kingdom. ...
  3. Bear Fund

    A mutual fund designed to provide higher returns when the market ...
  4. Float Shrink

    A reduction in the number of a publicly traded company’s shares ...
  5. Capital Strike

    A refusal of businesses to invest in a particular sector of the ...
  6. Gray Market

    An unofficial market where securities are traded. Gray (or “grey”) ...

You May Also Like

Related Articles
  1. Markets

    What Is The Current Market Supply For ...

  2. Trading Strategies

    5 Ways To Adapt To Tough Markets

  3. Stock Analysis

    Playing The Bull Run Without Worry

  4. Charts & Patterns

    Trading Against the Grid and Away from ...

  5. Economics

    The Beginning Of A Bear Market?

Trading Center