Bear raid: Difference between revisions
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A '''bear raid''' is a type of [[stock market]] strategy, where a [[Trader (finance)|trader]] (or group of traders) attempts to force down the price of a [[stock]] to cover a [[short selling|short position]]. The name is derived from the common use of |
A '''bear raid''' is a type of [[stock market]] strategy, where a [[Trader (finance)|trader]] (or group of traders) attempts to force down the price of a [[stock]] to cover a [[short selling|short position]]. The name is derived from the common use of |
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'bear' or ''bearish'' in the language of [[Market sentiment]] to reflect the idea that investors expect downward price movement. |
'bear' or ''bearish'' in the language of [[Market sentiment]] to reflect the idea that investors expect downward price movement. |
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Revision as of 14:58, 22 February 2011
A bear raid is a type of stock market strategy, where a trader (or group of traders) attempts to force down the price of a stock to cover a short position. The name is derived from the common use of 'bear' or bearish in the language of Market sentiment to reflect the idea that investors expect downward price movement.
A bear raid can be done by spreading negative rumors about the target firm, which puts downward pressure on the share price. This may be a form of securities fraud. Alternatively, traders could take on large short positions themselves, with the large volume of selling ideally causing the price to fall, making the strategy self perpetuating.