Take profit, often abbreviated TP, is an exit instruction intended to realize gains when a specified favorable price or profit condition is reached. It can apply to a whole position or only a selected portion.
Target, trigger and execution
For a simple long, a profit target is normally above entry; for a short, it is normally below entry. The selected reference may be a last, mark or index price where supported. A target expressed as a return percentage also depends on how the platform defines that return.
Some take-profit instructions trigger a market order, while others place or use a limit order. A trigger being reached does not mean a limit order has filled. Market execution can occur at a different price because of liquidity and slippage.
What the target leaves unresolved
Taking profit on part of a position leaves the remainder exposed. Changes to position size may require checking whether exit quantities adjust automatically. Linked stop-loss orders may be canceled on triggering or execution according to the particular order design.
Fees, funding and prior partial trades affect net profit. The label “take profit” therefore describes the order’s purpose, not a guaranteed positive result or the best possible exit.