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 options trading can provide income.
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 equip traders with knowledge such as distinguishing between call and put options. A call gives the ability to acquire an asset at a set price, while a put option gives the right to sell it.
In trading terminology, buy to open vs buy to close is important. Buy to open means starting a new contract, while buy to close means covering a sold position.
The iron condor strategy is an income-generating options play using multiple calls and puts, aiming to profit from low volatility.
In market orders, bid vs ask reflects the market spread. The buy bid is what the market will pay, and the ask price is what sellers want.
For options, sell to open vs sell to close is another distinction. Initiating a short by selling means beginning with a sell order, while Selling to exit means exiting a trading plan bought position.
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 trigger short entries.
Overall, mastering these strategies — from call and put comparison to the meaning of trailing stop loss — prepares market participants to succeed in any market condition.