Learning how to make money in a bear market is a key competency for every trader who wants to succeed when markets decline. In a bear market, simply holding stocks might not work, but different approaches like hedging can generate returns.
When discussing settlement terms, what many call the cash payment settlement option is often monetary settlement, meaning the no physical asset is delivered.
An options trading course can equip traders with knowledge such as call vs put options. A call option gives the opportunity to purchase an asset at a set price, while a put gives the right to sell it.
In trading terminology, the difference between buy to open and buy to close is important. Entering a trade via purchase means initiating exposure, while buy to close means covering a sold position.
The iron condor options setup is a limited-risk/limited-reward structure using multiple calls and puts, aiming to profit from low volatility.
In market orders, bid vs ask reflects the buy and sell prices. The bid is what the market will pay, and the ask is what sellers want.
For options, understanding sell to open and sell to close is another distinction. Selling to create a position means starting exposure by selling, while Selling to exit means exiting a bought position.
Rolling options is adjusting an existing trade by closing one contract and opening another to adapt to market changes.
A dynamic stop loss is a stop that follows price that protects gains by moving with the market. This is not to be confused with a fixed stop, since it moves favorably with price.
Chart patterns like the two-peak pattern signal a bearish setup after two highs at the same level. Recognizing it can help traders exit early.
Overall, learning these definitions — from differences between call and options trading example put to what is trailing stop loss — prepares market participants to succeed in any market condition.