1. To close out a market position by executing an offsetting order canceling that position.
2. Disengaging from a speculative foreign exchange Forward Market or Leads and Lags position.
3. In futures, simultaneous liquidation of both short and long positions when the pricing spread between the cash and futures market closes, or returns to normal. If the spread tightens up, the long and short positions would be reversed again. Also known as spread trading.
4. Removing a bank's Wire Transfer payments to other banks in the event the bank is unable to cover its end-of-day Net Settlement obligations to other banks.
