Bull (stock market speculator)


A bull is a stock market speculator who buys a holding in a stock in the expectation that in the very short-term it will rise in value whereupon they will sell the stock to make a quick profit on the transaction. Strictly speaking the term applies to speculators who borrow money to fund such a purchase, and are thus under great pressure to complete the transaction before the loan is repayable or the seller of the stock demands payment on settlement day for delivery of the bargain. If the value of the stock falls contrary to their expectation, a bull suffers a loss, frequently very large if they are trading on margin. A bull has a great incentive to "talk-up" the value of their stock or to manipulate the market in their stock, for example by spreading false rumour, to procure a buyer or to cause a temporary price increase which will provide them with the selling opportunity and profit they require. A bull must therefore be contrasted with an investor, who purchases a stock in expectation of a medium-term or long-term increase in value due to the underlying performance of the company and its assets. The speculator who takes a directly opposite view to the bull is the bear, who speculates on a stock decreasing in value, having sold short. A bull market is a period during which stock market prices rise over a sustained period, therefore to the advantage of bulls.

History of the term

An early mention of the terms bull and bear appears in the 1769 edition of Thomas Mortimer's Every Man his own Broker, published in London, as follows, relating to speculators operating in Jonathan's Coffee-House in Exchange Alley :
This refers to the former practice of stock-brokers, abolished circa 1980's in London, allowing their clients to trade on credit during a period of about two weeks, known as an account, on the completion of which all purchases and sales made during the account period had to be paid for on the settlement date. A net trading loss would result in the client having to make a cash payment to the broker.

Quasi-fraudster

In early usage the terms bull and bear were akin to naming a variety of fraudster, as is made clear by Mortimer, writing about 40 years after the scandal of the South Sea Bubble:

Early example

Mortimer gives an example of a bull as follows:

Sculptures of stock-market bulls

Several bronze statues of bulls representing positive investor sentiment exist near the locations of several stock markets or brokerage houses, for example: