Bull Market

In investment, the term bull market is used to denote a market environment in which demand for an asset exceeds supply. In a bull market, the value of the corresponding asset increases because buyers must raise their bids to encourage sellers to sell them the desired assets.

The term is also used in a broader sense to denote a strong demand for assets across an entire region or economy, rather than the market for just one asset.

Bull markets benefit investors who open long positions ahead of or during the bull market. The value of their assets in relation to the price which they bought them for increases. The difference between the price paid for an asset and the higher price at which it can be sold makes up the capital gain.

Investors who open short positions because they believe that prices will fall lose during a bull market. If they are forced to close their positions before prices fall again, they may make a capital loss.

See also: Bear market

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