A bear trap is, well, a trap relating to a bear (market). It's what happens when the price of an investment looks like it's dropping, so investors rush in, thinking they can profit on the drop...but then, it doesn't actually drop.
Bear investors often use the short strategy, meaning they buy low and sell high, sometimes the same stock repeatedly. As you can imagine, these bargain hunters thrive on a bottoming out market, so they could be quick to see potential in a lessening share price, and be quickly snared in the bear trap.
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Finance a la shmoop what's the difference between bear and bull? bear
pessimistic bad growly things coming Negative Nancy boo bear...Bull [Bear walking into water]
awesomesauce life's good you take it by the you know horns alright we're gonna
apply bear and bull to markets here but they apply to a whole lot of things and
a bear market is actually technical nomenclature that refers to sustained or [Bear market definition on 100 dollar bill]
prolonged periods of time where stock prices generally just fall...three
four five six seven eight quarters where the market craps the bed down down down
the bear market pattern is different from just a correction when the market
takes just a short term dump and then well you know quickly recovers yeah like [Bear market graph]
it has a bad quarter or two and then starts climbing again well that's not
the big bad bear that's just a correction a bull market is just the
opposite it goes up up up like this guy in his balloon-powered house and that's [House with balloons travels up a stock value graph]
it both are dangerous in the wild but on Wall Street huh you just have to watch
out for the Bears [Bear chasing a woman]
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