Why Markets Are Called Bulls and Bears
The financial terms "bull" and "bear" date back to 18th-century London. "Bear" came first, originating from middlemen who sold bearskins before the bears were actually caught, hoping prices would drop in the meantime. Because bears and bulls were historically pitted against each other, the bull—which strikes upward with its horns—became the natural linguistic opposite of the bear, which swipes downward with its paws.
The Bearskin Origin and Early Short Selling
The language of modern finance often relies on animal metaphors, but the term 'bear' was the first to enter the lexicon of exchange trading. Its roots trace back to an old proverb warning against selling the bear's skin before catching the bear. By the eighteenth century in London's financial district, this phrase had attached itself to speculators who engaged in an early form of short selling.
These middlemen, known colloquially as 'bearskin jobbers' or simply 'bears,' sold contracts to deliver bearskins or other assets at a fixed price in the future without actually owning them. Their entire strategy depended on wholesale prices falling before the settlement date, allowing them to purchase the goods cheaply, fulfill their delivery obligations, and pocket the difference as profit. Because these traders actively hoped for declining prices, the label 'bear' became permanently tied to a pessimistic market outlook and falling valuations.
How the Bull Became the Antagonist
Once the term 'bear' became entrenched among London traders to describe market sellers who anticipated a decline, the trading community needed an equally vivid counterpart to describe buyers expecting prices to rise. The bull emerged as the natural opposite, partly due to the popular culture of the era, where bull-and-bear baiting matches were well-known spectator sports that pitted the two animals against one another.
Over time, a physical metaphor reinforced this pairing and helped it endure across centuries of market commentary. Market observers noted that when a bull attacks, it lowers its head and thrusts upward with its horns, mirroring the upward momentum of rising asset prices. Conversely, a bear strikes downward with its heavy paws, evoking the downward pressure of falling prices and contracting valuations.