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Derivatives




Bear Trap


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.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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