What Is A Bull?
A bull is an investor or a stock market speculator who buys a security or stock with the expectation that it will increase in price so they can sell to make a profit.
The term “Bull” refers to optimistic investors who try to profit from the upward movement of stocks. Bull investors purchase securities with the hope that they can sell them later at a higher price.
Bulls take advantage of the market’s upward movement to make a profit, and they execute frequent trades mainly in a “bull market.” A bull market is a condition where stock prices keep increasing for a sustained period, which could last for several weeks, months, and years. Usually, stock prices must rise above 20% or more for there to be a bull market.
It is common for bulls to borrow funds to purchase stocks during a bull market, hoping that when they sell at a higher price, they can repay the loan while also making greater profits. The act of borrowing funds to trade is known as margin trading. Margin trading involves borrowing funds from a broker to trade a financial asset to increase potential profits significantly. Because bulls often execute trades using borrowed funds, they purchase securities or stock that can potentially go up within a short-term before the loan is repayable.
Bulls run into a loss when their expectation that the stock prices will go up does not happen. For instance, a bull investor buys a stock hoping that they will sell it when the price goes high, but instead, the price reduces. Bulls may use Stop-loss orders when executing trades to limit the risk of losses. Stop-loss orders allow investors to specify a price at which to sell a financial asset if the price moves downward.
Bulls often refer to stock market speculators who buy stocks because they think prices will go higher. However, the term is not limited to the stock market alone. You can find bulls in other financial markets, such as cryptocurrency, real estate, commodities, or foreign currencies.
Melissa is a cryptocurrency trader who believes that the price of Bitcoin will soon go up, so she purchases it. Within a couple of days, Bitcoin price begins an upward movement as she predicted. After making a 15% increase, Melissa sells off her Bitcoin holdings, earning a 15% return on her investment.« Back to Glossary Index