What is 'What is a bull market?'? | Freetrade Dictionary

We explain what a 'bull market' means

A bull market is generally defined by a 20 per cent rise in the stock market that takes place after a 20 per cent drop in the market.

This is not a precise definition and ‘bull market’ is often used to describe a situation in which investors are upbeat, putting a lot of money into stocks and think that the economy is going to perform well for the foreseeable future.

Though it’s usually used in the context of the stock market, ‘bull market’ can be used to describe almost any area of investment. You might have a ‘real estate bull market’ or a ‘bull market in the fine wine industry.’

The term ‘bullish’ is also derived from ‘bull market.’ To be ‘bullish’ about a particular stock, industry or market just means that you are confident that it’s going to perform well and increase in value.

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More terms

Running yield

The annual interest payment (dividend) divided by the current market price of a bond.

DMO

The United Kingdom Debt Management Office. It’s an executive agency responsible for managing the government’s debt and cash needs, primarily through issuing gilts and Treasury bills.

Nominal amount

The face value of a gilt. It represents the amount that will be repaid to the holder at maturity and is also used to calculate the dividend or coupon payment.

Dirty price

The total price payable on the purchase of a gilt. It’s calculated as the clean price plus accrued interest.

Stock Exchange

A physical/digital place where stockbrokers and traders can buy and sell securities.

Hedge Fund

Investment funds that are often associated with riskier and shorter-term trading strategies.

Custodian bank

Learn what a custodian bank is.

Costs and Charges

The money you pay when investing.

Balance sheet

A summary of a company's finances, including its assets, liabilities and shareholder equity.

What is a bull market?