Unwind a Position
The term Unwind a Position refers to when a trader systematically closes out a trade.
A position usually refers to a series of long only or short only trades into the same security over a period of time. Positions can hedged or unhedged, and can also be composed of more than one asset type. An example of this would be an equity position that is hedged with a derivative trade such as a butterfly or condor. In this way, the trader is using the derivatives to amplify the returns from the equity position. In this example all equities and derivatives would be considered as part of the position. Unwinding a Position is when the all assets of the position are closed out resulting in zero exposure in that asset.