Bull and bear on the stock exchange: "bestial" face of the stock market

The fact that the stock market there are bulls and bears, heard even far from the exchange industry inhabitants. These are key figures in the auction and frequent guests of financial news. It is their actions that are explained by the ups and downs of stocks and stock indices. Who are they and what are they doing? And why the main characters of the exchange got "animal names"?

What does "bull" and "bear" mean on the exchange?

Bulls are called traders who play to raise prices. They expect the share price to grow, so they are bought. On the exchange, this is called "open a long position", or "stand in long" (from English long, that is "long"). When (and if) their expectations are justified, they will close the position, that is, they will sell the shares.

Bears, on the contrary, play on a slide. They believe that the current stock prices are too high and will fall. Therefore, they sell or open a short position. They also say that bears are shorts or stand in shorts. These terms have gone from English short, which in Russian means "short". After a while they close their positions - buy back the sold shares at a lower price.

So, who are the bull and bear on the exchange? These are the opposing sides, leading an eternal irreconcilable argument. In other words, the buyer and the seller.

How is the fight going?

The battlefield of the modern bull and bear - a table of quotations (in the language of traders - "glass"). The parties are fighting by applying for purchase or sale. The price of a share directly depends on who is stronger at the moment - bulls or bears. If the force is on the side of the former, then the price will rise. Conversely, the more aggressive the bears are, the lower they can lower the value of the stock.

Thus, the movement of the price of any market asset shows how bulls and bears behave on the stock exchange. Example: the company's accounts were published, which some traders considered optimistic, while others - on the contrary. Accordingly, the first group becomes bulls - it buys shares of the company, seeing the potential for their growth. The second group, considering that shares have no reason to grow, sells them, or shorts. On the one whose faith in his rightness is stronger, and the outcome of the struggle depends.

Bullish and bear market

So, the bull and the bear on the stock exchange are constantly fighting. Depending on which of the parties wins, the market acquires a certain direction. If the shares grow, they say that the bull market has come. If the odds on the side of the bears, then the market, respectively, bearish.

In addition, there is the concept of market expectations, or sentiment. If a trader expects a fall in the price of an asset, they say that he is in a bearish mood. If he expects an increase in the value of the asset, then he has a bullish view of the market. At a certain moment bear can also bear a bullish mood, as well as vice versa.

Why them?

Why did the bull and bear become the main characters in the market? On the exchange, the meaning of these symbols is related to the peculiarities of their behavior during the attack. In any case, this is the main version, which has been considered official for several hundred years.

How does the attacking bull behave? He tries to raise the opponent on the horns. The buyer on the market acts the same way - by acquiring shares, he thereby raises their value. Bear, attacking his enemy, beats his paw from top to bottom. So, market bears, selling shares, help to reduce their prices.

Symbols of exchange trade

A long-ago analogy between the behavior of animals and market players came to all liking. The bull and bear on the stock exchange became cult figures and main characters. The main stars of the exchange industry are even immortalized in the form of sculptures. The most famous of them is set near the largest German stock exchange in Frankfurt.

True, more often the creators tried to capture the bull, because it is the symbol of financial optimism. The most famous statue of this animal is located not far from Wall Street in New York. It's called - "Attacking bull."

Other residents of the stock exchange "zoo"

The bull and the bear are not the only representatives of the fauna on the exchange. Among traders you can meet, for example, chickens - extremely vigilant, if not cowardly, players. They experience such a strong fear of loss that they open positions very rarely. There are also market sheep - traders who trade with an eye on bulls and bears. Usually they join the market movement too late, when most of the profits are already lost. The most greedy traders are called pigs. They try to seize everything to the last, why often stand up against the market or in time do not fix the profit. This name came from the British expression "greedy as a pig". There are also market hares - players who make many trades in a short time (scalpers). But there are also honorary titles, for example, the stock wolf. This is how experienced participants are called, which are a kind of market trading guru.

Another representative of the animal world, which deserves special attention, is the moose. Both the bull and the bear on the stock exchange try to avoid meeting the elk in all possible ways. However, from time to time they encounter him, or rather catch him. Unlike other animals, elk is not a type of trader's behavior. Losem called loss, negative result of the transaction. This name originates from the English word loss, which means "loss". No trader wants to catch an elk, that is, get a loss. But no one can avoid this. Because losing trades in trading is a normal part of the process. However, it is important that the moose were not too big. As traders say, do not "feed the moose", that is, keep a loss-making position. It should be "cut" in time - sell falling shares or close the short position, if they grow.

The division of traders into bulls, bears and other animal people is very conditional. The bull in a certain period can turn into a bear and vice versa. Sometimes the market is so harsh that the most desperate trader-brave man becomes a chicken. And of course, not a single wolf is insured from a meeting with a moose.