Scale out

An order type where an investor slowly lets go of a stock as the price increases. This strategy locks in profits and at the same time leaving a percentage of the holding in play as the price increases to lock in extra gains. For example, if a stock is at $20 a share and slowly climbed to $25 a share, an investor who has intentions to unload 100 shares will sell the first 20 shares at $20 and another 20 shares at $21 until all of the available shares are discarded.

This strategy maximizes gains while at the same time reducing exposure should the stock fall back down to a previous level.

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