The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to talk about the definition of a bear market which is simply just this idea that securities or any underlying index would fall at some point. Typically in the same year time period, so in a 52-week time period, it would fall a total of 20% from peak to trough. And so, when we see a security or an index fall by more than 20%, it's classically defined as being in a bear market. Now, this can easily reverse and it can be an intraday bear market. We actually saw in a lot of securities back at the end of 2018 with kind of the reversal and crash that the market had during that period, a lot of securities actually entered a bear market even short-term for a day or so before they bounced out of a bear market. It can happen on a very short period of time, but it’s just simply the correction in pricing of 20% from peak to trough. Now, my personal problem with this is that everyone’s always looking for 20% as