Square Off
Closing an open position by taking the opposite trade in the same quantity, leaving no net exposure.
How it is identified
Test: net position in the security becomes zero after the offsetting trade
Unit
qualitative
In depth
Squaring off is how intraday and derivative positions are closed without any delivery taking place — the buy and the sell net to zero and only the difference is settled in cash. In the Indian cash segment this is only possible within the same session; carry a position overnight and delivery obligations attach. Partial squaring is common and leaves a reduced position rather than none. The important distinction is between squaring off and selling: selling delivered shares reduces a holding, while squaring off cancels an obligation that never became a holding.
Worked example
Buy 500 shares at ₹500 and sell 500 at ₹508 the same day. The position is squared off, nothing is delivered, and the profit is (508 - 500) x 500 = ₹4,000 less charges.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Square Off” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.