A bear is a market participant who believes market momentum suggests a decrease in asset prices. Bears advocate what is referred to as a bear market, where aggregate number of investors who expect stock prices to decline is larger than the number who believes prices will rise. In general, bears have a pessimistic outlook for equity prices.

Bear Trade Examples

Oftentimes, asset values become overbought. Short positions typical of bear traders help drive down prices to accurately reflect fair value. Types of bear trades include selling short, purchasing put options, selling calls, and bear call/put spreads. The strategy behind bear trades in to profit from an expected decrease in security prices.

What is a Bear? - Article By Better Trades