Selling Into Strength

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Selling Into Strength

The act or practice of selling a security while the price is rising but when the seller expects the trend to reverse. This could result in a smaller profit but allows the seller to lock in profits before the reversal begins, which reduces the potential for loss. Selling into strength carries no risk for the seller, but it does come with the opportunity cost that the reversal will not take place and the seller will miss more profit. However, selling into strength may prevent a serious loss that comes from waiting until the reversal materializes.