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, simply holding stocks might not work, but different approaches like hedging can generate returns.
When discussing settlement terms, the other term for cash payment settlement option is often cash settlement, meaning the no physical asset is delivered.
An comprehensive course on options can teach the fundamentals such as call vs put options. A call option gives the ability to acquire an asset at a set price, while a put contract gives the opportunity to sell it.
In trading terminology, the difference between buy to open and buy to close is important. Buy to open means initiating exposure, while Closing a position by buying means closing an open short trade.
The popular iron condor technique is a neutral-market options strategy using both a call spread and a put spread, aiming to benefit when prices stay within a range.
In market orders, bid compared to ask reflects the market spread. The buy bid is what buyers are willing to pay, and the ask price is what is required to sell.
For options, understanding sell to open and sell to close is another distinction. Selling to create a position means starting exposure by selling, while Closing a long position by selling means ending a long trade.
Rolling a position is adjusting an existing trade by changing trade parameters to manage risk.
A trailing stop is an adjustable exit point that limits downside 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 possible trend change after two credit spread highs at the same level. Recognizing it can help traders exit early.
Overall, understanding these concepts — from call and put comparison to how trailing stops work — equips traders to navigate complex markets.