InvestorQ : What exactly do we understand by a bearish market?
Nisha Chandani made post

What exactly do we understand by a bearish market?

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2 years ago

What exactly is a bearish market? It is an expectation that prices are going to fall. Well you can define bearishness in terms of the overall market index or in terms of specific stocks and sectors. For example, in 2008 traders across the world were virtually bearish on all asset classes. Similarly, most traders and investors in India continue to be bearish on IT and Pharma due to the global headwinds over the last few quarters. Thanks to options you can now actually take a bearish view on the markets. Being bearish does not just mean selling your holdings and staying out of the market. With a robust options market, you can hold on to your existing equity positions and yet play the markets on the downside markets. Options allow you to bet on the downside of the market and participate in the weakness without disrupting your existing portfolio.