Bear CD

Bear CD
A certificate of deposit whose interest rate fluctuates in inverse correlation to the value of an underlying market index. In other words, the interest rate paid on the CD increases as the underlying market index decreases in value.

This type of CD is used for two main purposes: speculation or hedging. An investor may want the safety of a CD but with the market exposure of a bear CD. This CD is bearish because the investor is betting that the market will fall during the life of the CD.

This type of instrument is also used to hedge actual market positions. If an investor has a long position that is highly correlated to the underlying market index, he or she may invest his or her excess cash in a bear CD, which can offset losses in the market investment.


Investment dictionary. . 2012.

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  • Bear — (b[^a]r), v. t. [imp. {Bore} (b[=o]r) (formerly {Bare} (b[^a]r)); p. p. {Born} (b[^o]rn), {Borne} (b[=o]rn); p. pr. & vb. n. {Bearing}.] [OE. beren, AS. beran, beoran, to bear, carry, produce; akin to D. baren to bring forth, G. geb[ a]ren, Goth …   The Collaborative International Dictionary of English

  • bear — Ⅰ. bear [1] ► VERB (past bore; past part. borne) 1) carry. 2) have as a quality or visible mark. 3) support (a weight). 4) (bear oneself) behave in a specified manner: she bore herself w …   English terms dictionary

  • bear — bear; bear·a·ble; bear·baiting; bear·bine; bear·ish; bear·skin; bear·ward; bug·bear; cud·bear; for·bear·ance; for·bear·ant; for·bear·er; for·bear·ing·ly; for·bear·ing·ness; fore·bear; over·bear·ance; over·bear·ing·ly; bear·er; bear·ing; for·bear; …   English syllables

  • Bear — (b[^a]r), n. [OE. bere, AS. bera; akin to D. beer, OHG. bero, pero, G. b[ a]r, Icel. & Sw. bj[ o]rn, and possibly to L. fera wild beast, Gr. fh r beast, Skr. bhalla bear.] [1913 Webster] 1. (Zo[ o]l.) Any species of the genus {Ursus}, and of the… …   The Collaborative International Dictionary of English

  • Bear — (b[^a]r), v. i. 1. To produce, as fruit; to be fruitful, in opposition to barrenness. [1913 Webster] This age to blossom, and the next to bear. Dryden. [1913 Webster] 2. To suffer, as in carrying a burden. [1913 Webster] But man is born to bear.… …   The Collaborative International Dictionary of English

  • bear — bear1 [ber] vt. BORE, borne (see 3), bearing, bore, born [ME beren < OE beran < IE base * bher , to carry, bring > L ferre, Gr pherein, Sans bharati, (he) bears] 1. a) to hold and take along; carry; transport b) to hold in the m …   English World dictionary

  • bear — vb 1 *carry, convey, transport, transmit Analogous words: *move, remove, shift, transfer: hold, *contain 2 Bear, produce, yield, turn out are comparable when they mean to bring forth as products. Bear usually implies a giving birth to offspring… …   New Dictionary of Synonyms

  • Bear — (engl. Bär ) steht für: Mount Bear, Berg in Alaska Tupolew Tu 95 „Bear“, ein sowjetischen Langstreckenbomber Mitglieder der Bear Community Orte in den Vereinigten Staaten: Bear (Arkansas) Bear (Delaware) Bear (Idaho) Bear (Washington) Bear ist… …   Deutsch Wikipedia

  • bear — / bar/ vb bore / bōr/, borne, / bōrn/, also, born vt 1: to physically carry (as an object or message) the right of the people to keep and bear arms U.S. Constitution amend. II …   Law dictionary

  • BEAR — (Heb. דֹּב; dov). In ancient times the Syrian brown bear, Ursus arctos syriacus, had its habitat within the borders of Ereẓ Israel; it was found in the forests of Lebanon until World War I and is still occasionally reported in Lebanon and… …   Encyclopedia of Judaism

  • BEAR — Cette page d’homonymie répertorie les différents sujets et articles partageant un même nom. Bear peut désigner : le nom breton du village de Bégard ; un terme en anglais pour : ours ou porter ; la ville de Bear, aux États… …   Wikipédia en Français

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