Unlike stock futures and options, which have a fixed expiry date, commodities have different expiry dates depending on the underlying. As a result, it is critical to be aware of the expiry and squaring-off process ahead of time.

Because the majority of contracts are deliverable, the delivery process begins five days before the contract expires, which is known as the tender-delivery period. As a result, this is a signal for those investors/traders to exit their positions if they are not interested in taking or giving delivery of their holdings.

Square off trading refers to the practice of closing an existing position in the market. This can mean selling a held position or buying back a shorted asset to lock in profits or cut losses.
For instance, if a trader buys 100 shares of Apple at $150 each, they might square off by selling these shares when the price rises to $160, securing a profit. Conversely, if the price drops to $140, squaring off would minimize further losses. In futures trading, squaring off involves buying back or selling the contract before expiration. For example, a trader who shorted oil futures at $70 a barrel might square off by buying back the contracts at $65 a barrel, profiting from the price decline.

Square off trading is the practice of closing an existing position in the market by taking an opposite position. For instance, if a trader buys 100 shares of a company, they square off the position by selling 100 shares of the same company. This is often done within the same trading session, especially in intraday trading, to avoid overnight risks.

For example, if a trader buys 50 shares of Company X at $100 each, and later the same day, the price rises to $105, they can sell those shares to lock in a profit of $5 per share. Conversely, if the price drops to $95, they might sell to limit losses to $5 per share. Square off ensures positions are closed and gains or losses are realized within the day.