Learning how to make money in a bear market is a key competency for every trader who aims to protect capital when prices fall. In a downtrend, traditional long positions may lose value, but different approaches like hedging can generate returns.
When discussing settlement terms, an alternative name for cash payment settlement option is often cash-based closing, meaning the profit or loss is paid in cash.
An options education program can equip traders with knowledge such as distinguishing between call and put options. A call option gives the right to buy an asset at a set price, while a put option gives the opportunity to sell it.
In trading terminology, the difference between buy to open and buy to close is important. Entering a trade via purchase means initiating exposure, while Purchasing to exit means closing an open short trade.
The popular iron condor technique is a limited-risk/limited-reward structure using multiple calls and puts, aiming to profit from low best day trading stocks volatility.
In market orders, the bid-ask difference reflects the market spread. The buy bid is what the market will pay, and the ask price is what the market demands.
For options, sell to open vs sell to close is another distinction. Sell to open means opening a short position, while Closing a long position by selling means ending a long trade.
Option rolling is adjusting an existing trade by closing one contract and opening another to adapt to market changes.
A trailing stop is a moving stop order that limits downside by tracking price in real time. 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 highs at the same level. Recognizing it can trigger short entries.
Overall, mastering these strategies — from call vs put option to how trailing stops work — gives investors tools to navigate complex markets.