Having a net obligation amount is a risk-reduction method used in financial contracts that involves combining or aggregating several financial obligations. Netting lowers the financial risks of two or more parties by reducing their credit, settlement, and other risks. An investor may balance a position in one asset or currency with another position in the same or a different one. It is the process of balancing losses in one position with gains in another. As an example, if an investor is long 100 shares of security and short 40 shares of the same security, the investor's net position is long 60 shares.