Squaring off

A process whereby investors/traders buy or sell shares and later reverse their trade to complete a transaction is called squaring off of a trade.

Indian equity markets remain open between 9:55 am and 3:30 pm normally (At times there are sun outages when satellites fail to link with ground infrastructure of the two exchanges (the servers where buy and sell orders are matched). During these times the trading period is extended till 4:15 pm to compensate for the time lost in between).

If you purchase 1000 shares of say Reliance Industries and sell them later before the market closes then you have squared off your buy position.

Similarly, if you sell 1000 shares of google and purchase them later then you have squared off your sell position.