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1. See: Close a position.

2. To correct a mistake. For example, if an investor instructs his/her broker to sell a security and the broker instead buys it, the broker must re-sell the security, and pay the client what he/she may have lost in the mistake. This process is known as unwinding.


1. To close out a relatively complicated investment position. For example, an investor who practices arbitrage by taking one position in stocks and the opposite position in option contracts would have to unwind by the date on which the options would expire.
2. To rectify a transaction in which a mistake has been made. For example, because of a misunderstanding, a brokerage firm may have bought the wrong stock for a customer. The firm must then unwind the erroneous trade by selling the stock just purchased and buying the correct stock.
References in periodicals archive ?
In cross-wound packages, when the yarn unwinds backwards the angular velocity is higher as when the yarn unwinds forwards, which leads to oscillations in the yarn tension.
As the unwinding velocity V is constant, it is possible to unwind yarn from a cylindrical package with a smaller angular velocity than from a parallel package.
The researchers think the enzyme in question unwinds those strands, a process vital to DNA repair and replication.
With optimism riding high for AA, a rejection at its short-term trendline or in the 38-39 region could send the shares back for a retest of support at their intermediate-term trendlines as this optimistic sentiment unwinds.