If you’ve ever caught a business news segment, you’ve probably heard anchors throwing around terms like “bull market” and “bear market” as if everyone just naturally knows what they mean. But beyond the basic idea that one’s good and one’s bad, the real mechanics of these market conditions—and how they got their animal nicknames—are pretty interesting.
How the Stock Market Works (The Quick Version)
Before we dive into bulls and bears, let’s cover the basics. The stock market is essentially a place where people buy and sell ownership stakes in companies. When you buy a share of stock, you’re purchasing a tiny piece of that company. The price of that share goes up or down based on how many people want to buy it versus how many want to sell it—classic supply and demand.
Companies sell shares to raise money for growth, and investors buy them hoping the company will do well and the stock price will increase. The overall “market” is tracked through indexes like the S&P 500 or Dow Jones Industrial Average, which measure how a group of major companies are performing. When most stocks are rising, we say the market is up; when most are falling, the market is down.
What Bull and Bear Markets Actually Mean
A bull market refers to a period when stock prices are rising, typically defined as a 20% or more increase from recent lows. During bull markets, investors are optimistic, companies are generally doing well, and people are more willing to take risks with their money. Bull markets usually are driven by a strong economy with low inflation and optimistic investors. Think of the economic boom of the late 1990s or the recovery after the 2008 financial crisis—those were classic bull markets where prices kept climbing for years.
A bear market is essentially the opposite: a general decline in the stock market over time, usually defined as a 20% or more price decline over at least a two-month period. During bear markets, investors get nervous, sell off their holdings, and pessimism spreads. When a 10% to 20% decline occurs, it’s classified as a correction, and bear territory always precedes a bear market. The Great Depression, the 2008 financial crisis, and the COVID-19 pandemic’s initial impact all triggered bear markets.
The Colorful History Behind the Terms
Now here’s where things get interesting. These terms didn’t come from some modern marketing genius—they trace back to 18th century London, and the story involves everything from old proverbs to violent animal fights to one of history’s biggest financial scandals.
The “bear” term came first. Etymologists point to an old proverb, warning that it is not wise “to sell the bear’s skin before one has caught the bear”. This saying was about the foolishness of counting on something before you actually have it. By the early 1700s, traders who engaged in short selling (betting that prices would fall) were called “bear-skin jobbers” because they sold a bear’s skin—the shares—before catching the bear. The term eventually got shortened to just “bears.”
The real watershed moment came with the South Sea Bubble of 1720. The South Sea Company was a British joint stock company founded by an act of Parliament in 1711, and in 1720, the company assumed most of the British national debt and convinced investors to give up state annuities for company stock sold at a very high premium. When everything collapsed, share prices dropped dramatically, starting a “bear market,” and the story became the topic of many literary works and went down in history as an infamous metaphor.
As for “bull,” the origins are a bit murkier. The first known instance of the market term “bull” popped up in 1714, shortly after the “bear” term emerged. Most historians think it arose as a natural counterpoint to “bear,” possibly influenced by bull-baiting and bear-baiting, two animal fighting sports popular at the time—though I should note that’s somewhat speculative.
There’s also a popular explanation about how the animals attack: bears swipe downward with their paws while bulls thrust upward with their horns, which nicely mirrors market movements. While that’s a helpful memory device, it’s probably more of a convenient coincidence or a retroactive description than the actual origin. The term “bull” originally meant a speculative purchase in the expectation that stock prices would rise, and was later applied to the person making such purchases.
Why This Still Matters
These metaphors have stuck around for three centuries because they work. They’re visceral and easy to remember—you can picture a charging bull or a hibernating bear without needing an economics degree. They also capture something real about market psychology: the aggressive optimism of bulls pushing prices up versus the defensive pessimism of bears hunkering down.
Understanding these terms helps you follow financial news and, more importantly, recognize when markets are shifting. Knowing you’re in a bull market might make you less surprised by rising prices, while recognizing a bear market can help you avoid panic-selling when things look grim.
The Bull and Bear Markets are among those things I’ve heard for years and never knew their origin. This article is an attempt to explain it to myself.
Sources:
- Merriam-Webster Dictionary: https://www.merriam-webster.com/wordplay/the-origins-of-the-bear-and-bull-in-the-stock-market
- Savant Wealth Management: https://savantwealth.com/savant-views-news/article/bulls-and-bears-where-do-those-terms-come-from/
- Wikipedia – Market Trend: https://en.wikipedia.org/wiki/Market_trend
- CNN Business: https://www.cnn.com/2022/06/14/business/bear-bull-meaning-wall-street-stocks
- Today I Found Out: http://www.todayifoundout.com/index.php/2013/04/origin-of-the-stock-market-terms-bull-and-bear/
Bull Markets, Bear Markets and the Story Behind Wall Street’s Most Famous Animals
By John Turley
On January 13, 2026
In Commentary
If you’ve ever caught a business news segment, you’ve probably heard anchors throwing around terms like “bull market” and “bear market” as if everyone just naturally knows what they mean. But beyond the basic idea that one’s good and one’s bad, the real mechanics of these market conditions—and how they got their animal nicknames—are pretty interesting.
How the Stock Market Works (The Quick Version)
Before we dive into bulls and bears, let’s cover the basics. The stock market is essentially a place where people buy and sell ownership stakes in companies. When you buy a share of stock, you’re purchasing a tiny piece of that company. The price of that share goes up or down based on how many people want to buy it versus how many want to sell it—classic supply and demand.
Companies sell shares to raise money for growth, and investors buy them hoping the company will do well and the stock price will increase. The overall “market” is tracked through indexes like the S&P 500 or Dow Jones Industrial Average, which measure how a group of major companies are performing. When most stocks are rising, we say the market is up; when most are falling, the market is down.
What Bull and Bear Markets Actually Mean
A bull market refers to a period when stock prices are rising, typically defined as a 20% or more increase from recent lows. During bull markets, investors are optimistic, companies are generally doing well, and people are more willing to take risks with their money. Bull markets usually are driven by a strong economy with low inflation and optimistic investors. Think of the economic boom of the late 1990s or the recovery after the 2008 financial crisis—those were classic bull markets where prices kept climbing for years.
A bear market is essentially the opposite: a general decline in the stock market over time, usually defined as a 20% or more price decline over at least a two-month period. During bear markets, investors get nervous, sell off their holdings, and pessimism spreads. When a 10% to 20% decline occurs, it’s classified as a correction, and bear territory always precedes a bear market. The Great Depression, the 2008 financial crisis, and the COVID-19 pandemic’s initial impact all triggered bear markets.
The Colorful History Behind the Terms
Now here’s where things get interesting. These terms didn’t come from some modern marketing genius—they trace back to 18th century London, and the story involves everything from old proverbs to violent animal fights to one of history’s biggest financial scandals.
The “bear” term came first. Etymologists point to an old proverb, warning that it is not wise “to sell the bear’s skin before one has caught the bear”. This saying was about the foolishness of counting on something before you actually have it. By the early 1700s, traders who engaged in short selling (betting that prices would fall) were called “bear-skin jobbers” because they sold a bear’s skin—the shares—before catching the bear. The term eventually got shortened to just “bears.”
The real watershed moment came with the South Sea Bubble of 1720. The South Sea Company was a British joint stock company founded by an act of Parliament in 1711, and in 1720, the company assumed most of the British national debt and convinced investors to give up state annuities for company stock sold at a very high premium. When everything collapsed, share prices dropped dramatically, starting a “bear market,” and the story became the topic of many literary works and went down in history as an infamous metaphor.
As for “bull,” the origins are a bit murkier. The first known instance of the market term “bull” popped up in 1714, shortly after the “bear” term emerged. Most historians think it arose as a natural counterpoint to “bear,” possibly influenced by bull-baiting and bear-baiting, two animal fighting sports popular at the time—though I should note that’s somewhat speculative.
There’s also a popular explanation about how the animals attack: bears swipe downward with their paws while bulls thrust upward with their horns, which nicely mirrors market movements. While that’s a helpful memory device, it’s probably more of a convenient coincidence than the actual origin. The term “bull” originally meant a speculative purchase in the expectation that stock prices would rise, and was later applied to the person making such purchases.
Why This Still Matters
These metaphors have stuck around for three centuries because they work. They’re visceral and easy to remember—you can picture a charging bull or a hibernating bear without needing an economics degree. They also capture something real about market psychology: the aggressive optimism of bulls pushing prices up versus the defensive pessimism of bears hunkering down.
Understanding these terms helps you follow financial news and, more importantly, recognize when markets are shifting. Knowing you’re in a bull market might make you less surprised by rising prices, while recognizing a bear market can help you avoid panic-selling when things look grim.
The Bull and Bear Markets are among those things I’ve heard for years and never knew their origin. This article is an attempt to explain it to myself.
Sources: