The ability to offset derivative contracts with positive and negative values (the so called receivables and payables exposure) to figure out the net position at a given point of time for a given dealer or trader against a given counterparty or a pool of counterparties. For exmaple, a trader may apply netting to a given forward transaction by adding up all amounts to be received and then deducting all amounts to be paid. The net position reflects the actual reality about the trader’s exposure with respect to that kind of transactions.