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What Does the Bull and the Bear Mean in the Stock Market?
The bull and the bear are a celebrity pair here at Investing.com, and have graced our weekly comics dozens of times:
If you invest or trade in financial markets, you should already be familiar with these two and know the meaning behind them. If you’re new to investing or are still confused as to why these two large mammals get so much attention, here’s the reason why:
The most accepted explanation is derived from the way these two attack - the bear stands up high and attacks down, while the bull starts with a lowered head and launches his attacks upwards. In the same manner - a “Bear Market” starts high and drops down, and a “Bull Market” climbs up aggressively.
To put it simply, the bear signifies a weak economy, with markets in general decline. The bull is used to signify a strong economy, with markets heading higher.
If we’re looking at the historical origins, it began with the sell of bearskins: Middlemen would sell bearskins before even having them in stock, and thus they had to speculate what the price trappers ask for would be. The trappers would then usually profit from a spread (the price differences between cost and sell). In time, the middlemen got the nickname “Bears”, and the term became associated with market losses.
The Bulls came later:
Historically, in some societies, a bear would be pit against a bull as a form of entertainment, which led to the two animals being considered as opposites, so when a downturn market started being referred to as a “Bear Market”, the logical opposite would be a “Bull Market”.
Did you already know these cool facts about the bull & bear? Tell us in the comments.
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