What is ‘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.
Explaining ‘Pairoff’
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.
Further Reading
- The politics of aging in the May–December romance plot – www.tandfonline.com [PDF]
- Teaching tourism geography – www.tandfonline.com [PDF]
- A new theory of economic systems and its applications – link.springer.com [PDF]
- Clayton Christensen Comes to Wall Street – heinonline.org [PDF]
- Partner similarity for self-reported antisocial behaviour among married, cohabiting and dating couples: the Generation R Study – www.tandfonline.com [PDF]
- Stochastic choice in insurance and risk sharing – www.jstor.org [PDF]
