Learning how to make money in a bear market is an essential ability for anyone in the markets who wants to succeed when markets decline. In a declining market, buy-and-hold strategies can underperform, but different approaches like hedging can provide income.
When discussing settlement terms, an alternative name for cash payment settlement option is often monetary settlement, meaning the profit or loss is paid in cash.
An options education program can equip traders with knowledge such as understanding call and put options. A call gives the right to buy an asset at a set price, while a put gives the right to sell it.
In trading terminology, understanding buy to open and buy to close is important. Entering a trade via purchase means initiating exposure, while Purchasing to exit means covering a sold position.
The popular credit spread iron condor technique is a neutral-market options strategy using two spreads combined, aiming to benefit when prices stay within a range.
In market orders, bid vs ask reflects the buy and sell prices. The bid price is what the market will pay, and the ask is what sellers want.
For options, sell to open vs sell to close is another distinction. Sell to open means beginning with a sell order, while Closing a long position by selling means ending a long trade.
Rolling a position is adjusting an existing trade by closing one contract and opening another to adapt to market changes.
A trailing stop loss is a moving stop order that locks in profits by moving with the market. This is not to be confused with a fixed stop, since it adjusts without manual input.
Chart patterns like the two-peak pattern signal a potential reversal after two failed breakouts. Recognizing it can help traders exit early.
Overall, understanding these concepts — from call vs put option to how trailing stops work — equips traders to navigate complex markets.