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 ?
Based upon these results, we reject null hypothesis 1 and 2 and conclude that offsetting the position of the humerus in the posterior/superior direction using the offset humeral tray impacts both muscle length and moment arms with rTSA.
The committee added that since BA's offsetting scheme was launched in 2005, BA had encouraged the purchase of only 1,600 tonnes of offsets on average each year - approximately the emissions from "four return flights to New York on a (Boeing) 777".
Offsets function as a marketing mechanism for the seller, and are a way to "sweeten" the purchasing government's deal, thus "offsetting" the purchase price's impact on the country's economy for major purchases.
If the hedge is not considered effective, the entity cannot use hedge accounting and the entire derivative is marked to market in earnings; no offsetting changes in fair value are recorded.
(TEI), I am writing to commend the government for including a proposal in the February 16, 1999, Federal Budget that will permit the offsetting of interest on over- and under-payments of corporate tax liabilities.
The subproject was completed in March 1992 when the FASB issued Interpretation 39, Offsetting of Amounts Related to Certain Contracts.
Offsetting is a way of mitigating an individual's carbon dioxide emissions by paying to support green schemes which absorb an equivalent amount of CO2.
Most travellers are confused about carbon offsetting and nearly all of them think the Government should do more to improve awareness, a poll showed yesterday.
1092 was enacted in 1981 to prevent taxpayers from sheltering income by entering into offsetting positions with little or no net economic benefits, disposing of one leg at a loss in the first year, using this loss to offset income from that year and postponing gain recognition on the offsetting position until a later year; for examples of such transactions, see Smith, 78 TC 350 (1982), and Rev.
Countries that do not yet have offset requirements are observing other countries' offsetting benefits and are expressing interest in creating requirements for their own governmental purchases.
65-17 provides the option of either offsetting dividends or repatriating cash to satisfy the receivable created by the section 482 adjustment.(2) If Rev.
The Financial Accounting Standards Board published an exposure draft of its proposed interpretation, Offsetting of Amounts Related to Certain Repurchase and Reverse Repurchase Agreements.