Also found in: Idioms.
The predicament facing short sellers when a bear market reverses its trend and becomes bullish. The assets continue to sell in anticipation of further declines in price, and short sellers then are forced to cover at higher prices.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
An indication that a security's increasing price has reversed itself, causing some investors to sell it. Unfortunately, the reversal is short-lived or non-existent, and the security continues to increase. Investors who have sold after a bear trap often have a difficult time buying back their securities because they cannot find sellers. See also: Bull trap, Bull market.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.