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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
A predetermined price at which you plan to take profits on a trade.
Why It Matters
Profit targets help you lock in gains before they disappear. Options can double in value and then crash back to zero within days. A 50% profit target means you sell when you're up 50% - not wait for 100% and watch it evaporate. Greed kills more trading accounts than fear.
Key Points
- Common targets: 50%, 100%, or 2x your risk (risked $200, target $400 profit)
- Consider scaling out: sell half at target, let rest run with a trailing stop
- The market doesn't care about your cost basis - take profits when available
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Your First Options Trade
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Related Terms
Common Questions
A predetermined price at which you plan to take profits on a trade. Profit targets help you lock in gains before they disappear. Options can double in value and then crash back to zero within days.
Profit targets help you lock in gains before they disappear. Options can double in value and then crash back to zero within days. A 50% profit target means you sell when you're up 50% - not wait for 100% and watch it evaporate. Greed kills more trading accounts than fear.
Common targets: 50%, 100%, or 2x your risk (risked $200, target $400 profit)
Consider scaling out: sell half at target, let rest run with a trailing stop
The market doesn't care about your cost basis - take profits when available