Offset

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To offset is to liquidate an open position from an account by establishing an equal, but opposite, transaction. In futures trading, this eliminates the delivery obligation.[1]

Almost all futures positions are offset before the terms of the futures contract are realized. Although most positions are offset near the delivery term, the benefits of the futures contract as a hedging mechanism are still realized.[2]

References

  1. offset. CME glossary.
  2. Offset. Investopedia.