Profit Taking

AAA

DEFINITION of 'Profit Taking'

The action of selling stock to cash in on a sharp rise. This action pushes prices down temporarily. When traders are profit taking, the implication is that there is an upward trend in the security.

INVESTOPEDIA EXPLAINS 'Profit Taking'

For example, in the media you might hear something like this: "Markets were down today as traders took some profits off the table." It's common for prices to retract to some extent even in bull markets.

RELATED TERMS
  1. Day Trader

    A investor who attempts to profit by making rapid trades intraday. ...
  2. Trend

    The general direction of a market or of the price of an asset. ...
  3. Trend Analysis

    An aspect of technical analysis that tries to predict the future ...
  4. Security

    A financial instrument that represents: an ownership position ...
  5. Buy Weakness

    A proactive trading strategy in which a trader takes profits ...
  6. Flat On A Failure

    Closing out a position and taking profits when the security in ...
Related Articles
  1. Active Trading Fundamentals

    Support And Resistance Basics

  2. Options & Futures

    Introduction To Swing Charting

  3. Forex Education

    Capture Profits Using Bands And Channels ...

  4. Investing

    Finding Profit In Troubled Stocks

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center