Offsetting Transaction
a.k.a. Offset, Closing trade
A trade that cancels out an existing position, such as selling what you previously bought.
In plain English
A trade that cancels out an existing position, such as selling what you previously bought.
An offsetting transaction is the trade that undoes another one. You bought 1 lot of GBP/USD; selling 1 lot of GBP/USD offsets it, and your exposure is back to zero. Most platforms do this automatically when you click "close".
Partial offsets are common too: sell half to lock in some profit and let the rest run. In futures, offsetting is how almost everyone exits, long before the contract would ever require delivery.
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