2006-08-02 02:24:40 · 4 answers · asked by baron b 1 in Business & Finance ➔ Investing
What is so hard to understand about taking a profit in an investment?
The phrase, "Profit taking" is used in the media to describe a sudden decline after a runnup in price, when they have no other reasons for the decline.
It is another way of saying that the "Supply" side, or sellers, are in control in the Supply/Demand equation. There are more Sellers than Buyers, and a decline in price ensues.
The Sellers can be said to be "profit taking," but presupposes that they got in much earlier and had a profit, which means prices must have run up at some point.
2006-08-02 03:39:16 · answer #1 · answered by dredude52 6 · 0⤊ 0⤋
You mean, profit TAKING?
Well, imagine that you bought a stock that you thought was undervalued at $20. After a while, it's up to $45. You decide that the stock is now overvalued and it's a good time to sell. You sell it and realize a profit.
2006-08-02 11:35:38 · answer #2 · answered by NC 7 · 0⤊ 0⤋
It's just closing your position and taking or locking in the paper profit you have. If you're position is profitable say $5000, you close the position and take the profit.
2006-08-02 12:41:56 · answer #3 · answered by 4XTrader 5 · 0⤊ 0⤋
when the price of an asset (i.e. stock) increases in value & then you sell it to take the profit.
2006-08-02 10:31:15 · answer #4 · answered by Homer J. Simpson 6 · 0⤊ 0⤋