Where did the terms bear market and bull market come from?


Almost everyone has been involved with the stock market in one way or another. I think there is no one who is not interested in cryptocurrency trading, especially right now. There are two terms used to represent the ups and downs of the stock market: bear market vs bull market. Where do these terms come from, let’s take a look at them.

There are several theories on the use of the bull and the bear to represent the ups and downs of the stock market.

the origin of the use of these terms is traced back to popular animal fighting displays in England between the sixteenth and nineteenth centuries. this fight is fought by placing a bull or a bear against packs of dogs inside a corral. Bulls attack dogs with their heads pointing up from the ground, while bears claw downward from an elevated position. hence our initial theory that the pioneers of the London Stock Exchange, founded in 1801, may have included these terms in their jargon.

Another theory is that the term “bear” comes from the bear skin market. Intermediaries engaged in the trade of skins sold bear skins before they were bought by bear hunters. Why “It is not wise to sell bear skin before you have caught it” a proverb has emerged.

In the 18th century, the term bearskin (bearskin) was used as a “bearskin worker”, referring to the person who sold “bearskin” to “sell or buy” bearskin. . The term bear skin was later shortened to bear to name the stock sold by a speculator and the speculator who sells the stock.

The speculator sells a borrowed stock with a stated future delivery date and does so with the expectation that the stock price will decline and that the stock can be repurchased at a lower price while maintaining the difference from the selling price as profit. This type of sale was used by many who were involved in an early 18th century scandal known in England as the South Sea bubble.

What is a South Sea hot air balloon?

The South Sea Bubble is named after the South Sea Company, which was founded in 1711 to trade with the Spanish colonies in the New World. It is a UK-based public limited company operating in South America in the 18th century. Founded in 1711, the company became a monopoly in the Spanish South American colonies with an agreement signed during the War of the Spanish Succession. In return, he took over the debt incurred by England during the war. When the king takes over the company, South Sea Company stock is in high demand and soon shareholders receive returns of up to 100%. most speculators sold stocks they did not own and when the stock price suddenly fell, the result was a bankruptcy for the company and a tragedy for many investors. that is, speculation on the company’s stock caused the economic bubble known as the “south sea bubble” which caused financial destruction in 1720. the term bear is used before the south sea balloon burst; however, this event led to widespread use of the bear.

In fact, the poet Alexander Pope wrote a poem in 1720:

come and fill the cup of the south sea;
the gods of our lineage will take care:
happy europe accepts the bull,
and Jupiter joyfully drives the bear away.

at the same time another animal symbol appears on the market, opposite to the bear: bull term. It was originally used to indicate a speculative purchase made in anticipation of a rise in stock prices. The term bull was later applied to people who made such purchases. so why bull? It is affirmed because it is an animal chosen as a suitable alter ego for the bear.

Here is the latest theory with a simpler explanation. the bull is an animal that represents vitality, aggression and strength; The bear is known for its long hibernation. Therefore, in a bull market, the markets are active and profitable, but in a bear market, the markets are inactive and dormant until the next bull market.

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