Mastering strategies for earning in a bear market is a crucial skill for anyone in the markets who wants to succeed when markets decline. In a declining market, 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 transaction is settled in cash.
An options education program can cover advanced strategies such as distinguishing between call and put options. A call gives the ability to acquire an asset at a set price, while a put gives the ability to dispose of it.
In trading terminology, buy to open vs buy to close is important. Buy to open means creating a new position, while buy to close means ending an existing short.
The iron condor strategy is a neutral-market options strategy using multiple calls and puts, aiming to profit from low volatility.
In market orders, the bid-ask difference reflects the market spread. The bid price is what the market will pay, and the ask is what sellers want.
For options, differences between sell to open and sell to close is another distinction. Initiating a short by selling means starting exposure by selling, while Selling to exit means exiting a bought position.
Rolling a position is moving a position forward by shifting strike or expiration to manage risk.
A trailing stop is a stop that follows price that limits downside by tracking price in real time. This is not to be confused with a fixed stop, since it moves trailing stop loss favorably with price.
Chart patterns like the two-peak pattern signal possible trend change after two failed breakouts. Recognizing it can prevent losses.
Overall, understanding these concepts — from call and put comparison to what is trailing stop loss — prepares market participants to navigate complex markets.