Bear Trap
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situation confronting short sellers when a bear market reverses itself and turns bullish. Anticipating further declines, the bears continue to sell, and then are forced to buy at higher prices to cover.
See also selling short.
See also selling short.
| Bear Spread, Bear Raid | |
| Bearer Bond, Bearer Form |
Investopedia Financial Dictionary:
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Bear Trap
A false signal that the rising trend of a stock or index has reversed when it has not.
Investopedia Says:
This can occur during a bear market reversal when short sellers believe the markets will sink back to its declining ways. If the market continues to rise, the short sellers get trapped and are forced to cover their positions at higher prices.
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Want to profit on declining stocks? This trading strategy does just that. Short Selling Tutorial
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Barron's Finance & Investment Dictionary
Dictionary of Finance and Investment Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.
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