What is a bear market?

What is a Bear Market?

Definition: Bear Market or Bearish

A Bear is a speculator that believes that prices will fall in the market. The economic outlook is overall negative and that stocks will go down. If the entire market is trending downwards it is considered to be a bear market. A pessimistic outlook on the future.  

Origin

There are different theories on where the term Bear or Bear Market found its origins.

One explanation is that when a Bear attacks it swipes downwards. Similar to an individual stock price falling. 

The second theory dates back to early trading days. Middlemen would sell bearskins they had yet to receive and speculate on the future price. These middlemen would hope that the price went down so that they could profit off the spread between the two prices. Hence the term Bear was born, or Bear Market. 

Throughout history bull and bear fighting was a common blood sport. The two animals were widely considered to be opposites in the sport of battle. Since a bear represented a market downturn, a bull became a representation of the opposite, a rising market. 

Today both terms are still commonly used industry wide to describe market conditions. Statues of a bull and a bear stand outside the London Stock Exchange.

Bullish and bearish are also related terms that describe market conditions. To be bullish on a stock is to have a belief that the price will go up. To be bearish on a stock implies that you believe the price will go down.

Due to their contrasting views on future prices, bulls and bears continue to spar. This is especially apparent during the early morning hours before market open on sites like Wall Street Bets. It is common to see the two groups fighting which creates some highly entertaining feuds.

Bears are pessimistic in a stock’s future price and are therefore widely considered to be cynical assholes. 

Examples

“Futures are blood green, bears are fuk”

”Bears will rule the day”

“It’s an unpopular opinion, but I miss the bear market”

An image of the word hashtag bear
Bear about to be slaughtered by a Bull.

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