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‘The Wolf of Wall Street,’ featuring Leonardo DiCaprio as Jordan Belfort, intriguingly labels its protagonist as a wolf, a nod to the frequent use of animal metaphors in financial markets to describe various trading behaviors and market conditions.
This article explores common animal slang in the stock market, such as bulls, bears and black swans, each symbolizing different market trends and investor behaviors.
Bulls and bears the classic dichotomy
Bears and bulls are probably the first creatures that come to mind when thinking about animals in trading.
Many people interested in financial markets are familiar with these terms or will soon notice their frequent use.
Bulls represent rising market trends, and bears represent falling trends. According to the origin story, the terms come from how each animal attacks bulls charge upwards, and bears swipe downwards.
Bull and bear markets are typically determined by a 20% move. For example, in late 2018, the S&P 500 almost hit a bear market with a 19.8% drop.
It was the pandemic that marked the end of the longest bull market in history. From 2009 to 2020, the S&P 500 saw returns of 400.5% over 135 months as the economy recovered.
These two terms bull and bear not only describe the market but also represent investor sentiment.
A bull is optimistic, buying stocks at fair prices. However, if prices become too high or negative news emerges, investors turn bearish and start selling to prevent losses or secure profits.
Black swans
Black swans are next on the popularity list, but this term is not about people this time.
A black swan event is a highly unexpected one that causes a powerful and widespread impact, deviating sharply from what’s usually anticipated.
They are extremely rare like the housing market crash in 2007 to 2008, the Fukushima nuclear accident in 2011 or the Covid-19 pandemic.
The idea of black swan events became well-known, thanks to Nassim Nicholas Taleb, a finance expert, author and former Wall Street trader.
In 2007, Taleb talked about these unpredictable and catastrophic events in his book well before the 2008 financial crisis.
He emphasized that market players should be ready for the upcoming downturn, even if it seems unlikely.
Rabbits, turtles, whales, unicorns, sharks, wolves and others
Rabbits, turtles and other animals extend beyond the common bulls, bears and swans. Exploring other animals in trading is…
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