Learning how to make money in a bear market is a key competency for anyone in the markets who wants to succeed when prices fall. In a declining market, traditional long positions may lose value, but alternative tactics like short selling can generate returns.
When discussing settlement terms, the other term for cash payment settlement option is often cash settlement, meaning the profit or loss is paid in cash.
An options education program can teach the fundamentals such as distinguishing between call and put options. A call contract gives the opportunity to purchase an asset at a set price, while a put option gives the ability to dispose of it.
In trading terminology, the difference between buy to open and buy to close is important. Buy to open means initiating exposure, while Closing a position by buying means ending an existing short.
The popular iron condor technique trading plan is an income-generating options play using multiple calls and puts, aiming to earn premium in a sideways market.
In market orders, bid vs ask reflects the buy and sell prices. The buy bid is what the market will pay, and the offer is what sellers want.
For options, differences between sell to open and sell to close is another distinction. Sell to open means starting exposure by selling, while Closing a long position by selling means exiting a bought position.
Option rolling is extending or changing terms by closing one contract and opening another to capture more profit.
A trailing stop is an adjustable exit point 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 a repeated resistance. Recognizing it can help traders exit early.
Overall, mastering these strategies — from call and put comparison to what is trailing stop loss — gives investors tools to profit even in challenging times.