Profit taking

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Profit taking

Action by short-term securities traders to cash in on gains created by a sharp market rise, which pushes prices down temporarily but implies an upward market trend. See: Ring the [cash] register.

Profit Taking

The act of selling a large quantity of security immediately after it has spiked in price, such that the seller will realize a great deal of capital appreciation. For example, suppose one buys a security at $5 and it suddenly rises to $15, and an investor sells the security. If enough investors do this, it can cause a significant, but temporary, drop in price. However, technical analysts see it as a signal of an uptrend. It is also called taking profits.

profit taking

The general widespread selling of securities or of a particular security after a significant price rise as investors realize, or take, their profits. Although profit taking depresses prices, it does so temporarily. The term usually implies that the market is trending upward. Also called taking profits.

Profit taking.

Profit taking is the sale of securities after a rapid price increase to cash in on gains.

Profit taking sometimes causes a temporary market downturn after a period of rising prices as investors sell off shares to lock in their gains.