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


To change from a long position to a short position or from a short position to a long position. A long position is ownership of a security, while a short position is debt. Thus, to offset a long position is to sell a security, and to close a short position is to buy out the debt.


The liquidation of a futures or option position by purchasing (for a short position) or selling (for a long position) an equal number of identical contracts so that no further obligation exists.


You offset an options or futures position by taking a second position in a contract with identical terms, buying if you sold initially or selling if you bought initially.

With the offset, you neutralize any potential obligation you had to fulfill the terms of the contract, and you may make a profit or reduce a loss with the transaction.

For example, if you'd sold an equity call option that is close to being in-the-money, you might buy an offsetting call option. That neutralizes your obligation to deliver the underlying stock if the option you sold is exercised.

In a tax context, you can use capital losses to offset an equivalent dollar amount of capital gains, or up to $3,000 in capital losses to offset ordinary income. In either case, the offset allows you to reduce the tax you owe.

Further, banks have the right of offset if a borrower defaults on a loan. That right allows a bank to seize assets in the borrower's deposit accounts with the bank to reduce or eliminate any loss on the loan.

References in periodicals archive ?
This mechanism can be seen in 3-way intersections with 35-ft off-set as well, but it is not present in a 3-way intersection with 45-ft off-set.
Any scheme that doesn't include plans to reduce emissions, or involves the purchase of unverified or non-genuine off-sets, could be open to the accusation that it is actually leading to an increase in greenhouse gas emissions.
The off-set fullback (B) becomes the lead-blocker on the play.
The Virgin One account, which was launched in 1997, was one of the first mortgages that allowed consumers to off-set their current account against their home loan to reduce the amount of interest they paid.
Mr Spowart will also look at ways of introducing off-set and internet banking across the HBOS group, particularly for business customers.
We like to run it out of a twins off-set strong [ILLUSTRATION FOR DIAGRAM 2 OMITTED] or our stack set [ILLUSTRATION FOR DIAGRAM 3 OMITTED].
The rest will have to off-set those costs elsewhere in the business or lower earnings.
Off-set mortgages give you the option of using your savings to cut what you owe on your home.
5 per cent on its Open Plan, compared with ten per cent on its traditional mortgages, while people with off-set mortgages are more likely to buy other products from their provider than other mortgage customers.
If these savings were off-set against the average mortgage of pounds 73,669 on which borrowers are paying an average of six per cent interest, they could save pounds 15,191 during the course of a 25-year mortgage, leading to a collective saving of pounds 42.
Strong growth in healthy soft drinks such as non-sugared RTD tea and bottled water helped to expand overall sales, though this growth was partially off-set by declines in high-sugar soft drinks, such as carbonates and fruit juice.
Said Stephen Barnabee, associate finance officer for CHRISTUS: "These improvements have directly led to much greater success in leveraging suppliers for reduced costs and this has enabled CHRISTUS to stay ahead of the inflation curve, using reductions to current operating expenses to off-set the impact of new technology costs.