Best Binary Options Brokers: 2020 Ranking
  • Binarium

    Best Choice! The leader in our ranking!
    Perfect for beginners!
    Free Demo Acc + Free Trading Education!

  • Binomo

    Good choice for experienced traders!


To save this word, you’ll need to log in.

Definition of bullish

Keep scrolling for more

Other Words from bullish

Examples of bullish in a Sentence

These example sentences are selected automatically from various online news sources to reflect current usage of the word ‘bullish.’ Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

What’s the Difference Between Bullish vs. Bearish

Have you heard the term bullish vs. bearish? If you watch investing news channels, or read investing publications, you will almost certainly hear people throw around the term “bear” and “bull”. Often, analysts will say something like “it’s a bear market” or a “bull market”. So why are animal terms being brought into the investing world? Because it’s an easy way to describe whether a market is “optimistic” (or likely to rise) or “pessimistic” (likely to sink).

The difference between bullish bearish is that bull markets refer to markets were confidence is high and asset prices are rising, while bearish markets are markets were confidence is low and asset prices are sinking. This describes the difference between bullish and bearish.

You can make money whether markets are bullish or bearish

That’s right, money can be made whether markets are bullish or bearish. You might not think that it’s possible to make money off of sinking markets, at least if you’re new to the investing world, but where prices are moving, there is a chance to make money. That’s how the world of finance works. At the end of the day, markets are really about price movements.

If you believe that a company, say Apple Inc, is going to sink, you can borrow Apple stocks from a brokerage firm and sell them. This is called short selling. The catch is that you have to repay the brokerage firm and you have to do so using Apple stocks. So if Apple stocks suddenly rise, you’ll have to pay more to repay the stocks.

Let’s say you buy 1,000 dollars worth of Apple stocks at $100 dollars a piece. That means you invested $100,000 dollars. Now, let’s say prices sky rocket to $150 dollars a piece. Apple just released a new product, for example, and it’s taking the world by storm, so now investors are excited.

You’re not on the hook for $100,000 dollars, the amount you initially used to buy stocks. You’re on the hook for 1,000 shares of Apple stock which now cost $150,000 dollars. This means you will have lost $50,000 dollars! In fact, short-selling is one of the few ways you can lose more than you invest. Let’s say shares rise to $300 dollars a piece. Now you’re on the hook for $300,000 dollars worth of shares. That’s far more than what you initially invested!

Where bears and bulls got their name

No one’s really sure where the names came from. Some say that bull markets come from the fact that bulls charge forward, and usually thrust their horns in the air to attack. Bears on the other hand, generally stand up, but then swipe down, or even lunge at the ground. It’s also interesting to note that once upon a time, bears and bulls were actually placed in pens and forced to fight each other for sport.

Best Binary Options Brokers: 2020 Ranking
  • Binarium

    Best Choice! The leader in our ranking!
    Perfect for beginners!
    Free Demo Acc + Free Trading Education!

  • Binomo

    Good choice for experienced traders!

Another theory comes from bear fur trades. These traders, who gained the nickname “bears” would sell their bear skins before they even had them. More or less, these “bears” had a negative outlook on markets and wanted to get their cash before markets dropped. As a result, the term “bear” traders stuck. Meanwhile, bulls were always the opponents of bears in fights, so optimistic people started to be called bulls.

What To Do: Bullish vs. Bearish Markets

As you have almost certainly figured out, your investing strategy in bull markets, vs. bear markets is going to be very, very different. Markets will essentially be acting in opposite ways, and as a result, your strategy will be pretty much opposite during each type of market.

If it’s a bull market, than you need to charge forward like a bull and seize the opportunity. Expand your investments, consider leverage, free up a bit of capital to take riskier investments. Get at it! Bear markets are the time to buy, buy, buy!

If you’ve found yourself reaching a bear market, however, it’s time to sell before prices drop! Remember, when your goal when you buy stocks is to buy low, sell high, so make your sales as markets peak. If you’re very confident that it’s a bear market, than you can look into strategies like short selling, but remember, when you bet against markets, the risks are often much greater!

Bullish Trading Strategies

Bullish strategies in options trading are employed when the options trader expects the underlying stock price to move upwards. It is necessary to assess how high the stock price can go and the timeframe in which the rally will occur in order to select the optimum trading strategy.

Very Bullish

The most bullish of options trading strategies is the simple call buying strategy used by most novice options traders.

Moderately Bullish

In most cases, stocks seldom go up by leaps and bounds. Moderately bullish options trader usually set a target price for the bull run and utilize bull spreads to reduce risk. While maximum profit is capped for these strategies, they usually cost less to employ.

Mildly Bullish

Mildly bullish trading strategies are options strategies that make money as long as the underlying stock price do not go down on options expiration date. These strategies usually provide a small downside protection as well. Writing out-of-the-money covered calls is one example of such a strategy.

You May Also Like

Continue Reading.

Buying Straddles into Earnings

Buying straddles is a great way to play earnings. Many a times, stock price gap up or down following the quarterly earnings report but often, the direction of the movement can be unpredictable. For instance, a sell off can occur even though the earnings report is good if investors had expected great results. [Read on. ]

Writing Puts to Purchase Stocks

If you are very bullish on a particular stock for the long term and is looking to purchase the stock but feels that it is slightly overvalued at the moment, then you may want to consider writing put options on the stock as a means to acquire it at a discount. [Read on. ]

What are Binary Options and How to Trade Them?

Also known as digital options, binary options belong to a special class of exotic options in which the option trader speculate purely on the direction of the underlying within a relatively short period of time. [Read on. ]

Investing in Growth Stocks using LEAPS® options

If you are investing the Peter Lynch style, trying to predict the next multi-bagger, then you would want to find out more about LEAPS® and why I consider them to be a great option for investing in the next Microsoft®. [Read on. ]

Effect of Dividends on Option Pricing

Cash dividends issued by stocks have big impact on their option prices. This is because the underlying stock price is expected to drop by the dividend amount on the ex-dividend date. [Read on. ]

Bull Call Spread: An Alternative to the Covered Call

As an alternative to writing covered calls, one can enter a bull call spread for a similar profit potential but with significantly less capital requirement. In place of holding the underlying stock in the covered call strategy, the alternative. [Read on. ]

Dividend Capture using Covered Calls

Some stocks pay generous dividends every quarter. You qualify for the dividend if you are holding on the shares before the ex-dividend date. [Read on. ]

Leverage using Calls, Not Margin Calls

To achieve higher returns in the stock market, besides doing more homework on the companies you wish to buy, it is often necessary to take on higher risk. A most common way to do that is to buy stocks on margin. [Read on. ]

Day Trading using Options

Day trading options can be a successful, profitable strategy but there are a couple of things you need to know before you use start using options for day trading. [Read on. ]

What is the Put Call Ratio and How to Use It

Learn about the put call ratio, the way it is derived and how it can be used as a contrarian indicator. [Read on. ]

Understanding Put-Call Parity

Put-call parity is an important principle in options pricing first identified by Hans Stoll in his paper, The Relation Between Put and Call Prices, in 1969. It states that the premium of a call option implies a certain fair price for the corresponding put option having the same strike price and expiration date, and vice versa. [Read on. ]

Understanding the Greeks

In options trading, you may notice the use of certain greek alphabets like delta or gamma when describing risks associated with various positions. They are known as “the greeks”. [Read on. ]

Valuing Common Stock using Discounted Cash Flow Analysis

Since the value of stock options depends on the price of the underlying stock, it is useful to calculate the fair value of the stock by using a technique known as discounted cash flow. [Read on. ]

Best Binary Options Brokers: 2020 Ranking
  • Binarium

    Best Choice! The leader in our ranking!
    Perfect for beginners!
    Free Demo Acc + Free Trading Education!

  • Binomo

    Good choice for experienced traders!

Like this post? Please share to your friends:
Binary Options Trading Education
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: