Understanding how to profit during a bear market is a key competency for any investor who aims to protect capital when the trend is bearish. In a bear market, buy-and-hold strategies can underperform, but diversified strategies 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 trading course can teach the fundamentals such as understanding call and put options. A call contract gives the opportunity to purchase an asset at a set price, while a put option gives the right to sell it.
In trading terminology, the difference between buy to open and buy to close is important. Opening a position by buying means starting a new contract, while buy to close means ending an existing short.
The iron condor strategy is pocket option strategy a neutral-market options strategy using multiple calls and puts, aiming to benefit when prices stay within a range.
In market orders, the bid-ask difference reflects the buy and sell prices. The bid price is what buyers are willing to pay, and the offer is what the market demands.
For options, understanding sell to open and sell to close is another distinction. Selling to create a position means opening a short position, while Closing a long position by selling means ending a long trade.
Rolling options is extending or changing terms by shifting strike or expiration to manage risk.
A dynamic stop loss is a stop that follows price that locks in profits by adjusting as the asset moves. This is not to be confused with a fixed stop, since it tightens automatically.
Chart patterns like the double top chart 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.