taking profits


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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.

taking profits

References in periodicals archive ?
According to the survey, 72 per cent of German investors, 84 per cent of UK investors and 52 per cent of French respondents plan to focus their investment teams more on taking profits and rebalancing portfolios.
Louis also induced selling, with some investors taking profits in recent gainers, briefly pushing down the Dow more than 110 points, they added.
28 July 2009 - Amagerbanken said it is taking profits today from the stock in Danish biotech company Genmab A/S (CPH: GEN), which it has rated at "buy" with a certain cautiousness.
Perhaps because of the increasing availability of broker research on the internet, they are taking profits and reinvesting rather than following the herd.
First of all, there is evidence that the early, more aggressive hands among foreign investors are taking profits, and this is nowhere more apparent than in the sell-off of the banks.
Analysts said many investors thought share prices on both sides of the Atlantic had run ahead of themselves and were taking profits or keeping cash on the sidelines.
"At that point," she says, "Schering-Plough made up a large portion of my portfolio so I wanted to cut my exposure there." She sold enough stock to cover her son's education bills, effectively taking profits off the table and putting them to good use.
Those who seek to criticise the one-off French market for somehow taking profits away from existing outlets are missing the point.
"People are taking profits after huge gains this week made as the last group of hedge funds and other investors went dollar long," said Minori Uchida, a senior analyst at Bank of Tokyo Mitsubishi UFJ in Tokyo.
Late selling of equities for taking profits, however, ate into early gains, with many market players retreating to the sidelines ahead of the release of inflation data later this week.
They have also been taking profits on those stocks which bounced, after Bank of Scotland's bid for NatWest revived hopes of a bout of banking mergers and takeovers.
Prices of 10-year Japanese government bonds and bond futures fell Friday, with investors taking profits ahead of a three-day weekend.