Selling a gain on paper to make it real
Taking profit means selling a stock that has risen so the gain becomes real. Until you sell it is an unrealised gain, and it disappears if the price falls back. Selling also fixes the gain for tax purposes, which changes whether it can be offset against other losses in the same year. Like a stop-loss, many people decide the reason to sell in advance.
Selling at $1,200 a share bought at 1,000 locks in $200 per share.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.