Mastering strategies for earning in a bear market is an essential ability for every trader who seeks consistent profits when prices fall. In a declining market, buy-and-hold strategies can underperform, but different approaches like hedging can produce profits.
When discussing settlement terms, an alternative name for cash payment settlement option is often cash settlement, meaning the profit or loss is paid in cash.
An options education program can equip traders with knowledge such as call vs 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, buy to open vs buy to close is important. Entering a trade via purchase means starting a new contract, while Purchasing to exit means covering a sold position.
The popular iron condor technique is an income-generating options play using two spreads combined, aiming to benefit when prices stay within a range.
In market orders, the bid-ask difference reflects the two sides of a quote. The bid is what the market will pay, and the ask price is what is required to sell.
For options, differences between 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 ending a long trade.
Option rolling is moving a position forward by shifting strike or expiration to capture more profit.
A trailing stop loss is a moving stop order that locks in profits by moving with the market. This is not to be confused strangle option 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 prevent losses.
Overall, understanding these concepts — from call and put comparison to how trailing stops work — gives investors tools to navigate complex markets.