An adverse situation that short sellers confront when a bear market reverses itself and turns bullish. Anticipating the market further declining, the bears (bearish investors) continue to sell, and then are forced to buy at higher prices to cover their positions. Also, the bear trap, sometimes, sets off a false signal heralding the reversion of a rising trend of a stock or stock index, while actually that trend has not reversed itself.
November 13, 2023