Learning how to make money in a bear market is an essential ability for any investor who aims to protect capital when prices fall. In a declining market, simply holding stocks might not work, but different approaches like options trading can produce profits.
When discussing settlement terms, an alternative name for cash payment settlement option is often cash-based closing, meaning the profit or loss is paid in cash.
An options trading course can cover advanced strategies such as distinguishing between call and 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 creating a new position, while Closing a position by buying means closing an open short trade.
The popular iron condor technique is a neutral-market options strategy using multiple calls and puts, aiming to earn premium in a sideways market.
In market orders, bid compared to ask reflects the market spread. The buy bid is what a trader offers to buy, and the offer is what is required to sell.
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 Selling to exit means exiting a bought position.
Rolling options is adjusting an existing trade by closing one contract and opening put vs call another to manage risk.
A dynamic stop loss is an adjustable exit point that protects gains by tracking price in real time. This is not to be confused with a fixed stop, since it tightens automatically.
Chart patterns like the double top chart pattern signal a bearish setup after a repeated resistance. Recognizing it can prevent losses.
Overall, understanding these concepts — from call and put comparison to how trailing stops work — gives investors tools to navigate complex markets.