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Showing results for tags 'bears'.
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The aim of the bear call spread is to benefit from a fall in the price of the asset below the price at which the call options were sold. The premium on the long call minus the premium on the short call is now collected as profit, which is multiplied by the number of shares traded for the final payout.
A Bear Squeeze occurs when a large number of bearish traders are forced to close out their positions so that losses do not become excessive. This reversal in position actual created upward movement because a buy position is required to close a bear position.
I am interested in the mechanics of the forex market. Questions every new trader should be asking: What moves the the market? Yes, yes, I have heard all the pat answers. But they are all cliches. Does anyone really know? Where do those pretty lines and numbers come from? Yes, yes, I know they come from the liquidity provider. But where does the liquidity provider get them? He does not just make them up. Are there really people somewhere bidding and asking? Can I go there and watch them? I am sure that the big banks, hedge fund managers, and financial institutions cause most of the activity. OK. So what are they trying to do? Are they acting or reacting? Are they watching the same charts I am? Are their motives different from mine? Are they trying to accomplish something more that just making a profit? Why would a trader care if the price went up or down? I certainly do not care. I quickly change sides whenever the trend changes. Often I have several open trades; some long, some short. Can you give me an example of a trader who actively and aggressively wishes the price would go up or down? (Before he enters a trade, of course.) Hmmm! I just watched a gap up of 40 pips. Who pushed the buttons to make that gap appear on my screen? Whoever it was, has a different trading platform than I do. I do not see any provision on my platform where I can create a gap up or down. I am assuming that a human created that gap, or am I trading against a computer? I have got to know who is on the other side of my computer screen. Wow! I just saw the spread jump to 20 pips. Who decided that it ought to be that great? What is his name? Where does he live? Who gave him permission to widen the spread? Are there really mystical bears fighting with a heard of bulls to lower the price of their favorite currency? Or is this just a myth like Santa Clause? Let's pretend there really are bulls and bears. My question is; why do they care? What are they fighting for? And if the bulls manage to raise the price a few pips, how did they do it? Until I understand why the bears are trying to drive prices down and why the bulls are frantically trying to elevate prices, I have no business in this battle. I will get killed in the cross fire. Any hope of success depends on some real answers, not just bull.