Advertising

Offset

• Elimination of a long or short position by making an opposite transaction. Related: liquidation.

• To liquidate a futures position by entering an equivalent but opposite transaction. To offset an initial purchase, a sale is made; to offset an initial sale, a purchase is made. See also: Futures Market.

 
 Embedded terms in definition
 Futures market
Futures
Liquidation
Long
Market
Position
Purchase
Sale
Short position
Short
 
 Referenced Terms
 Actual hedging: Is the risk management of a position when a hedger has a bona fide long or short actual position and is involved in an Offsetting transaction. This offset is usually in the derivatives market.

 Advance commitment: A promise to sell an asset before the seller has lined up purchase of the asset. This seller can Offset risk by purchasing a futures contract to fix the sales price.

 Bankruptcy cost view: The argument that expected indirect and direct bankruptcy costs Offset the other benefits from leverage so that the optimal amount of leverage is less than 100% debt financing.

 Blended trade: Is the combination of two or more bonds or tranches executed as a single position. Often this is done to Offset the individual, lopsided risks in two very different instruments. By doing such a trade, an investor or portfolio manager is trying to create a more stable investment.

 Buy in: Occurs when a seller or short seller fails to deliver the securities required to satisfy a transaction's terms. The net financial impact of this transaction is charged to the account of the seller.To cover, Offset or close out a short position. Related: evening up, liquidation.

 
 Related Terms
 Mutual offset

<< Official unrequited transfers Offshore centers >>

What to Know Before Declaring Your Financial Independence: Twenty-somethings may not realize it, but every time they enter a new phase of their life as young adults - perhaps starting college, a career or a family - they're also venturing into a new world of money management. Here are ways to be prepared. More...

It is not good enough to have a good mind; the main thing is to use it well. - Rene Descartes

Advertising



Copyright 2009-2018 GVC. All rights reserved.