A bear raid is a type of stock market

Stock market

A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...

 strategy, where a trader

Trader (finance)

A trader is someone in finance who buys and sells financial instruments such as stocks, bonds, commodities and derivatives. A broker who simply fills buy or sell orders is not a trader, as they are merely executing instructions given to them. According to the Wall Street Journal in 2004, a managing...

 (or group of traders) attempts to force down the price of a stock

Stock

The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...

 to cover a short position

Short selling

In finance, short selling is the practice of selling assets, usually securities, that have been borrowed from a third party with the intention of buying identical assets back at a later date to return to that third party...

. The name is derived from the common use of
bear or bearish

Market trend

A market trend is a putative tendency of a financial market to move in a particular direction over time. These trends are classified as secular for long time frames, primary for medium time frames, and secondary for short time frames...

 in the language of market sentiment

Market sentiment

Market sentiment is the general prevailing attitude of investors as to anticipated price development in a market. This attitude is the accumulation of a variety of fundamental and technical factors, including price history, economic reports, seasonal factors, and national and world events.For...

 to reflect the idea that investors expect downward price movement.

A bear raid can be done by spreading negative rumor

Rumor

A rumor or rumour is often viewed as "an unverified account or explanation of events circulating from person to person and pertaining to an object, event, or issue in public concern" However, a review of the research on rumor conducted by Pendleton in 1998 found that research across sociology,...

s about the target firm, which puts downward pressure on the share price. This may be a form of securities fraud

Securities fraud

Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws....

. Alternatively, traders could take on large short positions themselves, with the large volume of selling ideally causing the price to fall, making the strategy self-perpetuating.