(redirected from offsets)
Also found in: Dictionary, Thesaurus, Legal, Encyclopedia, Wikipedia.
Related to offsets: Carbon offsets


Elimination of a long or short position by making an opposite transaction. Related: Liquidation.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Critique: Impressively informative, notably comprehensive, expertly organized and accessibly presented, "Social Security Offset Penalties" is one of those specialized instructional reference manuals that should be in every community library collection in every village, town and city in the country.
objective of Offsets strategy and Policy, successful offsets project
management and negotiation and how we can manage Offsets risks.
Programme, as well as OAPFD staff, to become effective PFD (Offset)
Older borrowers who remain in offset may increasingly experience financial hardship.
The GAO suggests that Congress consider adjusting Social Security offset provisions to reflect the increased cost of living.
Offsets are inherently regarded as a violation of the free market due to their market-distorting effects.
However, in the case of offsets, the treaty framework itself is based upon the rationale of essential interests--that is, the principle of necessity.
The distortion of World Trade Organization (WTO) trade rules could increase to such an extent that the WTO may request a change in the national trade policies of the countries practicing offsets. The Trade Policy Review (TPR) mechanism of the WTO serves such a formal supervision by the WTO.
private measures for mitigating any harm that offsets may cause and for
Defense offsets are anathematized as "economically inefficient
While this will be the first for Cardi B, it's going to be the fourth for Offset, who has fathered three kids from previous relationships.