Understanding how to profit during a bear market is a key competency for anyone in the markets who seeks consistent profits when prices fall. In a declining market, simply holding stocks might not work, but different approaches like options trading can produce profits.
When discussing settlement terms, the other term for cash payment settlement option is often cash settlement, meaning the transaction is settled in cash.
An comprehensive course on options 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 contract gives the ability to dispose of 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 iron condor options setup 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 two sides of a quote. The bid price is what the market will pay, and spy max pain the ask price is what the market demands.
For options, sell to open vs sell to close is another distinction. Selling to create a position means beginning with a sell order, while Selling to exit means ending a long trade.
Option rolling is moving a position forward by shifting strike or expiration to capture more profit.
A trailing stop is a stop that follows price that protects gains by tracking price in real time. This is not to be confused with a fixed stop, since it adjusts without manual input.
Chart patterns like the double top chart pattern signal a potential reversal after two failed breakouts. Recognizing it can trigger short entries.
Overall, mastering these strategies — from call vs put option to what is trailing stop loss — prepares market participants to succeed in any market condition.