DEFINITION of 'Pairoff'

1. A purchase of securities to offset a previously transacted sale of the same security.

2. A transaction in securities markets where off-setting buy and sell trades are settled in cash, based on the difference in the prices between the off-setting trades. No securities trade hands; instead the settlement difference between the trades is calculated, and a money wire is sent to the appropriate party.


1. The offsetting position is usually transacted within the same day of the original purchase. This is also referred to as crystallization.

2. Matching trades for pairoff can reduce settlement risks and security wire transfer fees. It is ultimately a form of speculation.

  1. Crystallization

    The act of selling and buying stocks almost instantaneously in ...
  2. Settlement Price

    In derivatives markets, the price used for determining profit ...
  3. Speculation

    The act of trading in an asset, or conducting a financial transaction, ...
  4. Sell

    The process of liquidating an asset in exchange for cash. The ...
  5. Buy

    1. A recommendation to purchase a specific security. A buy rating ...
  6. Futures Market

    An auction market in which participants buy and sell commodity/future ...
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