Learning how to make money in a bear market is an essential ability for every trader who aims to protect capital when markets decline. In a downtrend, buy-and-hold strategies can underperform, but different approaches like short selling can generate returns.
When discussing settlement terms, the other term for cash payment settlement option is often cash-based closing, meaning the no physical asset is delivered.
An options education program can teach the fundamentals such as distinguishing between call and put options. A call contract gives the ability to acquire 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. Entering a trade via purchase means starting a new contract, while Purchasing to exit means ending an existing short.
The iron condor options setup is a neutral-market options strategy using two spreads combined, aiming to profit from low volatility.
In market orders, bid vs ask reflects the buy and sell prices. The buy bid is what a trader offers to buy, and the ask is what the market demands.
For options, differences between sell to open and sell to close is another distinction. Initiating a short by selling means opening a short position, while sell to close means ending a long trade.
Option rolling is moving a position how to make money in a bear market forward by changing trade parameters to adapt to market changes.
A dynamic stop loss is an adjustable exit point that limits downside by adjusting as the asset moves. This is not to be confused with a fixed stop, since it adjusts without manual input.
Chart patterns like the M-shaped double top signal a bearish setup after two highs at the same level. Recognizing it can help traders exit early.
Overall, learning these definitions — from call and put comparison to the meaning of trailing stop loss — equips traders to navigate complex markets.