A:

The terms bear and bull are used to describe general actions and attitudes, or sentiment, either of an individual 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: Digging Deeper Into Bull and Bear Markets.)

RELATED FAQS
  1. How do you use put options to profit from a bear market?

    Learn how traders use put options in their trading strategies to remain profitable, even in a bear market. Everyday investors ... Read Answer >>
  2. What signals do traders watch for that signal a change in a bull market?

    Discover the various signals of bull market tops and what traders and analysts look for as signs of an impending bearish ... Read Answer >>
  3. How does the risk of investing in the aerospace sector compare to the broader market?

    Learn how the risk of investing in the aerospace sector compares to the broader market and how investors use this information ... Read Answer >>
Related Articles
  1. Investing

    How to Adjust a Portfolio in a Bear or Bull Market

    Investors shouldn't panic at the market's daily moves, but small adjustments in the face of a bull or bear market could be a prudent move.
  2. Investing

    What Does the Bull Market Anniversary Mean to You?

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

    The Elder-Ray Indicator: Seeing Into the Market

    Elder-ray helps determine the strength of competing groups of bulls and bears.
  5. Investing

    Embrace Bear Markets as a Fact of Investing

    Bear markets are a necessary part of investing. Trust your financial plan to get you through.
  6. Investing

    4 Large-Cap Core ETFs for Bull and Bear Markets (SPHQ, SPLV)

    Learn how U.S. large-cap stocks have fared thus far in 2016, and four ETFs to choose for gains during a bull or bear market for large-cap stocks.
  7. Investing

    Adapt To A Bear Market

    Learn how your portfolio should evolve to suit bear market conditions.
  8. Insights

    Are We Approaching a Bear Market?

    The U.S. has seen several deep bear markets since the start of the 20th century, but sentiment anticipating a new downturn may be premature.
  9. Investing

    Don’t Panic When the Next Bear Market Happens

    Take advantage of the next bear market and watch your investment in great companies grow.
RELATED TERMS
  1. Bull Market

    A bull market is a financial market of a group of securities ...
  2. Bear Market

    A bear market is a market in which securities prices fall and ...
  3. Bull Position

    A long position in a financial security, such as a stock in the ...
  4. Bear Trap

    A false signal that the rising trend of a stock or index has ...
  5. Gold Bull

    A slang term for a market or investor who is bullish on gold. ...
  6. Buy A Spread

    Option strategy that will be profitable if the underlying security ...
Hot Definitions
  1. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  2. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  3. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  4. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
  5. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
  6. Monte Carlo Simulation

    Monte Carlo simulations are used to model the probability of different outcomes in a process that cannot easily be predicted ...
Trading Center