do bulls and bears actual battle it out, or is that just a figure of speech?

[Fundu Vishy]

Pat,

A very nice question indeed.

There are two kinds of markets. Markets where there is 'Market Making' and where the market runs on 'Order Matching'. In markets there is no process of 'market making' a transaction goes through only based on the Supply and Demand. In markets where there is a market maker, there is a forced quote for buy and sell and depending on if the market maker(s) are bull / bears they can influence prices.

Coming to markets like India where the market is completely based on 'Order Matching' as against 'Market Making', it is the market which determines the price. The bulls and bears influence the market by quoting the orders to buy or sell a stock at a price which they believe is right. However, as an individual investor, when you want to buy or sell a stock at market price, which ever is the order that can be matched with your order both in terms of quantity and price, the trade gets done. But, when you look at the market in a broader perspective than just a single trade by an investor, you will see that the quotation for a stock by the bulls and bears and the balance or absence of balance there of decides on who wins the battle. If there are more and more people willing to sell a stock and far lesser buyers, the market will be in the hands of the bears and when there are more and more people willing to buy a stock and far lesser sellers, the bulls will have an upper hand.

Trust this clarifies

--
Fundu Vishy - Your 'Mutual' Friend
Follow me on twitter @funduvishy
I blog @ http://blog.powermf.com