In derivative contract, settlement by offset, denotes which one of the following?

A. Settlement of a maturing futures contract by cash payment in order to offset the mutal obligation on the contract

B. Closing out futures contract before maturity with an offsetting trade

C. Terminating a futures contract by executing a new contract by way of payment of cash in a mutually agreed proportion

D. A fresh contract is entered into by discarding the earlier contract outside the exchange

Answer: Option B

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