Bear Position

Filed Under: , ,
Dictionary Says

Definition of 'Bear Position'


Alternate term for a short position in a financial security. A bear position attempts to profit in a market by betting that prices will fall for certain securities. The short seller borrows securities in the hopes that prices will decline. When the price drops, the investor makes a profit on the price change. When the price rises, the investor loses money. There are also numerous alternative ways to initiate bear positions such as buying put options or buying inverse ETFs.

Investopedia Says

Investopedia explains 'Bear Position'


A bear position is the opposite of a bull position. A bear position is a trade or investment that is made in the hopes that the security's price will drop. If a short sale moves against the investor or trader, the trader may be exposed to unlimited losses since the price of the security can continue to rise. This is in contrast to a long position where the price of the security can move against the investor only a certain amount; that is, to zero. The use of alternative strategies to initiate a bear position can mitigate some of these risks.

Related Video for 'Bear Position'

comments powered by Disqus
Hot Definitions
  1. Securitization

    The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors.
  2. Economic Forecasting

    The process of attempting to predict the future condition of the economy. This involves the use of statistical models utilizing variables sometimes called indicators.
  3. Chicago Mercantile Exchange - CME

    The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interest rates, currency, equities, stock indices and agricultural products.
  4. Private Equity

    Equity capital that is not quoted on a public exchange. Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity.
  5. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  6. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
Trading Center