The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again at optionalpha.com where we show you how to make smarter trades and welcome back to the daily call. Today, we are going to be talking about the bear market definition and why I think that it's a little bit flawed. First, let’s get it out of the way. Most people use bear market definitions as a drop in 20% of the underlying value of a security or a bond ETF, currency, whatever you want to use in there. A 20% drop from the 52-week high, so basically, a healthy pullback, if you will from the recent highs. And why I think that this is a little bit flawed is that in many cases, it could either lead to people being overly-panicked when they hear that something is in a bear market or it can lead to people not realizing that something is actually still in the midst of falling because they think once it reaches that magic 20% drop threshold that it actually might be a good opportunity to buy. We've seen in many cases, particularly in the bond market and the currency markets in thi