A methodology which is used by an exchange clearinghouse to calculate the number of outstanding futures contracts in order to determine clearing margins. Based on the net basis method, the number of contracts equals the long and short futures positions offset against each other.
For example, consider a firm, member of a clearing corporation, which has three clients: one is long 50 futures, one is short 30 futures, and the other is short 10 futures. According to net margining, the clearing margin would be calculated based on 50-30-10= 10 futures contracts only.
