The bull and the bear on the stock exchange: the beastly face of the stock market

Even people far from the stock exchange industry have heard that there are bulls and bears on the stock market. These are key trading figures and frequent guests of financial news. It is their actions that explain the ups and downs of stocks and stock indices. Who are they and what do they do? And why did the main characters of the stock exchange get “animal” names?

What do "bull" and "bear" mean on the stock exchange?

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

By contrast, bears are short. They believe that current stock prices are too high and will fall. Therefore, they sell or go short. They also say that bears shorts or shorts. These terms came from the English short, which means "short" in Russian. After a while, they close their positions - they buy back the sold shares at a lower price.

So who are the bull and bear on the stock exchange? These are the opposing parties, leading an eternal irreconcilable dispute. In other words, a buyer and a seller.

How does the fight take place?

The battlefield of the modern bull and bear is a table of quotes (in the language of traders - “glass”). The parties are fighting by placing bids for the purchase or sale. The stock price directly depends on who is stronger at the moment - bulls or bears. If the strength 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 stock price.

Thus, the price movement of any market asset shows how bulls and bears behave on the exchange. Example: the reporting of a company was published, which some traders considered optimistic, while others - on the contrary. Accordingly, the first group becomes bulls - they buy up the company's shares, seeing their growth potential. The second group, considering that the stock has no reason to grow, sells them, or short. The outcome of the struggle depends on whose belief in one's righteousness is stronger.

Bull and Bear Market

So, the bull and bear on the stock exchange are in constant struggle. Depending on which side wins, the market acquires a certain direction. If the stock rallies, it is said to be in a bull market. If the preponderance is on the side of the bears, then the market, respectively, is bearish.

In addition, there is the concept of market expectation, or sentiment. If a trader is waiting for the price of an asset to fall, they are said to be bearish. If he is expecting an increase in the value of an asset, then he has a bullish outlook on the market. At a certain moment, a bear can also have a bullish mood, as well as vice versa.

Why exactly are they?

Why did the bull and the bear become the main characters of the market? On the exchange, the meaning of these symbols is associated with the peculiarities of their behavior during an 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 his opponent on the horns. A buyer acts the same on the market - by purchasing shares, he thereby raises their value. The bear, attacking his enemy, hits him with his paw from top to bottom. Likewise, market bears, by selling stocks, help lower their prices.

Stock trading symbols

The analogy between the behavior of animals and market players, drawn a long time ago, was to everyone's liking. The bull and bear on the stock exchange have become cult figures and protagonists. The main stars of the stock exchange industry have even been immortalized in the form of sculptures. The most famous of them is installed near the largest German stock exchange in Frankfurt.

True, more often the creators tried to capture the bull, because it is he who is the symbol of financial optimism. The most famous statue of this animal is located near Wall Street in New York. It is called “Attacking Bull”.

Other residents of the exchange "zoo"

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

Another representative of the animal world that deserves special attention is the elk. 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 they catch him. Unlike other animals, moose is not a type of trader's behavior. A moose is called a loss, a negative result of a transaction. This name originates from the English word loss, which means "loss". No trader wants to catch a moose, that is, to get a loss. But nobody can avoid it. Because losing trades in trading are a normal part of the process. However, it is important that the moose are not too large. As traders say, you shouldn't "feed the moose", that is, keep a losing position. It needs to be “slaughtered” in time - to sell falling shares or close a short position if they grow.

The division of traders into bulls, bears and other animal people is rather arbitrary. A bull in a certain period can turn into a bear and vice versa. Sometimes the market is so harsh that the most daring trader becomes a chicken. And of course, not a single seasoned wolf is immune from meeting a moose.