bear trap investment & finance definition
A
situation in which a bear market (a downward-moving market) changes directions and prices rise.
Bearish investors who expected the market to continue declining will continue
selling short (selling what they don’t own). Eventually they are forced to buy
their investments back at a higher price in order to avoid further losses.
Thus, the bears are caught in a trap.
See bear trap in Wall Street Words
An accumulation of shares being sold short by bears trying to drive down the price of a stock. The bear trap occurs when the bears find they must repurchase the shares from an individual or a group at an artificial price determined by the seller.
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