offsetting position
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offsetting positions — 1) Taking an equal and opposite futures position to a position held in the cash market. The offsetting futures position constitutes a hedge; 2) Taking an equal and opposite futures position to another futures position, known as a spread or… … Financial and business terms
Position — A market commitment; the number of contracts bought or sold for which no offsetting transaction has been entered into. The buyer of a commodity is said to have a long position and the seller of a commodity is said to have a short position .… … Financial and business terms
position — A market commitment. A buyer of a futures contract is said to have a long position and, conversely, a seller of futures contracts is said to have a short position. Chicago Board of Trade glossary Open contracts indicating an interest in the… … Financial and business terms
offsetting — Eliminating the obligation to make or take delivery of a commodity by liquidating a purchase or covering a sale of futures. This is affected by taking an equal and opposite position: either a sale to offset a previous purchase, or a purchase to… … Financial and business terms
naked option position — An open options contract that is not covered by an offsetting position in the underlying futures commodity or by another options contract against which it can be spread. Chicago Mercantile Exchange Glossary … Financial and business terms
Closing a Position — The delivery of underlying financial instruments or commodities against a future or option contract. The offsetting of a long or short position in a market by making an offsetting trade in the other direction. A trader would close a short… … Financial and business terms
Close Position — Executing a security transaction that is the exact opposite of an open position, thereby nullifying it and eliminating the initial exposure. Closing a long position in a security would entail selling it, while closing a short position in a… … Investment dictionary
Square Position — A term used in foreign exchange trading. The term square position denotes that the positions of the currency dealer are offsetting – the buy positions of the dealer are equal to the sell positions. When a dealer is in a square position, the … Investment dictionary
Outright Futures Position — A long or short trade on an underlying futures contract that has the potential for unlimited profit, but also carries the risk of unlimited losses. Outright futures are also called naked futures because they leave the investor highly exposed. To… … Investment dictionary
naked futures position — An open futures position that is not covered by an offsetting futures position or by an options contract against which it can be spread. Chicago Mercantile Exchange Glossary … Financial and business terms
Unwinding a Position — A long or short position is unwound, or reversed, by an offsetting transaction to result in a square or flat position. ► See also Long, Short … Financial and business terms
