Offset

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Offset

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

Offset

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.

offset

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.

Offset.

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 ?
Anil Ambani, whose firm 'Reliance Defence' would execute the 'off-set' clauses of the contract.
The 3-way intersection with 45-ft off-set shows slightly better HSCF-X (about 3% to 5% lower) than 25-ft and 35-ft intersections.
He advises the best way to off-set this high delivery charges is by "staging-in" operation of heavy motors to avoid a complete surge of electricity at any one time.
Key features include 3V and 5V operation, therm/alert signals, off-set register for system calibration, Operating current of fewer than 215 [micro]A and low self-heating 0.2[degrees]C max.
The drill units can be equipped with multi-spindle drill heads and off-set drill heads to increase productivity and versatility.
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Although he declined to detail the Harry Potter antics, his private off-set film collection includes antics from movies including Peter Pan and Black Hawk Down.
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Then, in order, we added zone run schemes, a spread pass, an off-set I and unbalanced sets, motion to create number advantages, and, more recently, spread shot-gun sets and misdirection trey schemes.
To make it seem even longer and give the bike a more custom look, Honda utilizes an off-set front suspension with a trailing-link.
"Give me something higher up that's going to show off my butt a little more." More fondly recalled are the numerous onscreen French kisses, which Tergesen and Meloni took off-set with playful lip-locks at the 2000 GLAAD Media Awards.
Actor Mohammed George - who plays the hunky removal man in the top soap - got down to some off-set dirty dancing with Page 3 beauty Serena at a West End nightclub.