The Market

What is a bear market?

A bear market is a market that falls continually over a number of months and sometimes a year. The best example was the last bear market in year 2000 when technology shares which had been driven up madly by inexperience investors tailed off as people realized that value of the shares was far too expensive and shares fell continuously for a number of months.

What is a bull market?

A bull market is a rising market which is fuelled by good news and by a constant demand for shares. In a market place where sellers are reluctant to sell as they believe the market is going higher.

What is a market maker?

A market maker is a person that matches buyers and sellers of shares and moves share price up or down, depending on demand.

Why are market makers needed?

Market makers are needed because they bring together buyers and sellers. They act rather like a wholesaler. A farmer, for instance, may produce a crop of apples, he goes along to the wholesaler who actually has people coming in to shops to buy his products.

Are market makers regulated?

The Financial Services Authority, the FSA, regulate all market makers.

What is insider trading?

Insider trading, which is obviously illegal, is where somebody acts by buying or selling shares on information that is not available to the general public.