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Bull and Bear

Bull:

A particular kind of investor who purchases shares in the expectation that the market price of that company’s share will increase.

When Investor/Trader sells  stock at a higher price and pockets the profit. Simply put, the bulls buy at a lower price and sell at a higher price.

For instance, if a bull buys a company’s share at Rs 100,  Investor/Trader would prefer selling the same stock at Rs 120 or any price higher than Rs 100 to make a profit.

Usually, a bull buys first at a lower price and sells later at a price higher than her/his cost of purchase.

Bulls are happy when the markets (the Sensex and Nifty) move upwards. A falling market takes bulls into hibernation.

Bear:

Bull’s counterpart is the bear.

A bear sells stocks first that Investor/Trader owns or borrows from, say a friend, and then purchases the same quantity of shares at a lower price.

If a bear sells first, say 100 shares of Reliance at Rs 1400, and later purchases the same number of shares at Rs 1375, then her/his profit is Rs 25 (1400-1375) per share.

This way Investor/Trader has got back the 100 shares of Reliance and simultaneously made a profit of Rs 2500. The shares can later be returned to the bear’s friend if  Investor/Trader had borrowed the same from a friend.

There are bears in the market that sell shares first without actually owning them unlike in the above example. Such selling is called naked short selling or going short on a stock.

Bears are happy in a falling market.

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