What Are the Terms Bull, Bear & Stag in the Stock Market?

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Bulls, bears and stags are all animals, but they have something else in common: they are words used to describe stock market activities. If you aren't sure what a stag profit, bull stag or stag speculator is, you are not alone. Are you wondering where these terms originated? Experts disagree, but it is interesting to see what some have to say.

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Bull Speculator Meaning

A bull market describes a scenario when things are going well with stocks, bonds and home prices on the rise for a lengthy period. Factors that influence this kind of growth include low inflation, optimistic investors and a strong economy. One of the best bull markets of all time took place from Dec. 4, 1987, through March 24, 2000; during this time, the Standard & Poor's 500 Index gained over ​580 percent​.

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Writers for The Corporate Finance Institute explain how speculation influences the stock market. Speculative investors are amongst the most active market traders, and they make decisions based more on technical analysis of market prices. Rather than paying attention to analyses of assets and securities, they try to make their money from short-term price fluctuations instead of holding out for the long term.

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Bull speculators are on the more optimistic side, expecting that stock prices will rise. They buy securities and hope to sell them shortly at higher prices. Bull speculators are often thought of as gamblers with an eye on making a profit, but their actions drive market sentiment.

Bear Speculator Meaning

On the other side of the spectrum is the bear market. This term describes a scenario when high inflation and low consumer confidence make investors more pessimistic. More stocks are sold than bought, causing market prices to fall. The longest bear market in history was from 1929 to 1932, which surrounded the start of the Great Depression. During that bear market, the Dow Jones dropped by ​89.2 percent​.

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A bear speculator anticipates that stock prices will fall, so they deal in short securities. This means that they borrow stock shares or other assets that they think will decrease in value. They then sell the borrowed shares to buyers who will pay the market price for them. This is a more advanced kind of investing for experienced speculators, and it isn't an investment strategy for the average person looking to set up a retirement fund.

What Is a Stag Speculator?

Stag speculators are investors who purchase new issues of stocks and sell them fast to make profits. In essence, stags gamble that the prices of new stocks will go up within hours or days. Typical stag speculators are more bullish than bearish and are willing to take on considerable risk.

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The final kind of speculative investor is the lame duck. Aptly named, these individuals start as bear investors, selling securities that they do not hold. The plan is to buy them at lower prices later and profit, but if they cannot deliver because the stock is no longer available and the buyer backs out, that former bear speculator is now a lame duck.

The origins of the terms bull and bear market may be traced back to their word etymology. The Germanic root of "bull" means to "blow, inflate [or] swell." As for bear, an old proverb that reads "to sell the bear's skin before one has caught the bear" could have led to the use of the word bear in the stock market. The word stag is defined as being without a partner, so perhaps this is equated with not being attached to the sold assets. The meaning of lame duck in the stock market is self-explanatory, suggesting the investor is in quite a predicament.

Consider also:How to Join the Stock Market

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