DEFINITION of 'Profit Range'
A range of prices that an underlying security can possess in order for an investment strategy to be profitable. For some strategies, the position taken will have two breakeven points. The range between these two points serves as the profit range for the strategy.
Next Up
BREAKING DOWN 'Profit Range'
When designing a strategy, the profit range is a useful metric for investors when they compare it to the volatility of the underlying asset. It allows investors to match profit ranges with appropriate volatilities. Large ranges should be used with high volatility assets and vice versa. A mismatch of volatility and profit range tends to lead to a loss on the position.
RELATED TERMS

Range
A stock's low and high prices for a particular trading period, ... 
Trading Range
The spread between the high and low prices traded during a period ... 
Volatility Ratio
A technical indicator used to identify price ranges and breakouts. ... 
Volatility Arbitrage
Trading strategies that attempt to exploit differences between ... 
Profit Target
A predetermined point at which an investor will exit a trade ... 
Profit
A financial benefit that is realized when the amount of revenue ...
Related Articles

Trading
Range Trade Forex With NonU.S. Dollar Pairs
If you are following a rangetrading strategy, you're better off with pairs that do not include the U.S. dollar. Find out why. 
Trading
Adjusting Day Trading Strategies For Different Market Conditions
Being a successful trader means knowing when to play the market and how. Find out what strategies will have you on top. 
Trading
Measure Volatility With Average True Range
Find more profitable entry and exit locations with this standard indicator. 
Trading
Trade Simple, Trade Smart
Simplicity can be a trader's best friend. Here is a simple day trading strategy which takes advantage of a stock's dynamics. 
Investing
How To Profit From Oil Volatility With The Following Strategies
The recent volatility in oil prices presents an excellent opportunity for traders to make a profit if they are able to predict the right direction. 
Trading
Make Better Options Trades With The Average Monthly Range
We'll show you how to use the average monthly trading range to score better returns. 
Trading
Range Bar Charts: A Different View Of The Markets
While range bars are not a type of technical indicator, traders can employ this useful tool to identify trends and interpret volatility. 
Trading
When Not To Trade
When conditions arise where systems are likely to perform poorly, traders must exercise discipline and cease trading. 
Trading
An Option Strategy for Trading Market Bottoms
The reverse calendar spreads offers a lowrisk trading setup that has profit potential in both directions. 
Trading
How To Profit From Volatility
We explain four key strategies to profit fom volatility in markets.
RELATED FAQS

What are the most common examples of RangeBound Trading strategies?
Learn some of the most common indicators and strategies that traders implement to generate profits from trading a rangebound ... Read Answer >> 
What is the difference between profitability and profit?
Calculating company profit and profitability are not one and the same, and investors should understand the difference between ... Read Answer >> 
What is the Volatility Ratio formula and how is it calculated?
Understand what the volatility ratio indicator is, how it is calculated and the way this technical indicator is used by traders ... Read Answer >> 
What are the top technical indicators used for RangeBound Trading strategies?
Learn how to identify when a market is range bound and what some of the technical indicators are that work best for trading ... Read Answer >> 
Why is the Volatility Ratio important for traders and analysts?
Read about the rationale behind Jack D. Schwager's volatility ratio, which compares recent trading ranges with historical ... Read Answer >> 
What does breakeven analysis tell a business about its shutdown point?
Learn what a breakeven analysis tells a company about its shutdown point, and understand why a company's breakeven point ... Read Answer >>