process of setting off matching sales and purchases against each other, usually by a clearing-house, especially of futures, options, and transactions in forward foreign currencies, an arrangement whereby it is not necessary to re-exchange currencies when a swap arrangement is terminated. For example, if company X and Y each in different countries sell each others' currencies against their own local currency and during the period of the swap agreement, one currency has moved up and the other down, then the agreement coult provide for a 'netting' whereby neither party will gain or lose by the transaction.