Markets & Economy

Bear Market

A sustained decline, often defined as a drop of 20% or more from the highs.

A bear market is a prolonged fall in prices, usually with fear and pessimism. It is painful but normal and temporary over long horizons. Bear and choppy markets are where cash-secured puts and the wheel tend to shine, because you get paid to buy stocks you want at lower prices.

For example

When the market is down 25% from its peak, that is a bear market. It is also when good companies go on sale.

Related terms

Bull MarketVolatilityCash-Secured Put

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