Learning how to make money in a bear market is an essential ability for anyone in the markets who aims to protect capital when the trend is bearish. 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 transaction is settled in cash.
An options trading course can teach the fundamentals such as call vs put options. A call gives the ability to acquire an asset at a set price, while a put contract gives the right to sell it.
In trading terminology, buy to open vs buy to close is important. Buy to open means initiating exposure, while Purchasing to exit means covering a sold position.
The iron condor strategy is a neutral-market options strategy using both a call spread and a put spread, aiming to earn premium in a sideways market.
In market orders, bid vs ask reflects the market spread. The bid price is what buyers are willing to pay, and the ask price is what sellers want.
For options, differences between sell to open and sell to close is another can i trade options after hours distinction. Selling to create a position means opening a short position, while Closing a long position by selling means exiting a bought position.
Rolling a position is moving a position forward by changing trade parameters to capture more profit.
A dynamic stop loss is a stop that follows price that limits downside 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 double top chart pattern signal possible trend change after two failed breakouts. Recognizing it can prevent losses.
Overall, learning these definitions — from call vs put option to the meaning of trailing stop loss — prepares market participants to navigate complex markets.