The process of offset, or liquidating one's position in the market, is also known as open interest. A margin deposit is a down payment on a contract. Two measures of market activity followed by traders, are volume and open interest.
Localization is made up of basis, quality adjustments, interest on margin, and commission.
In completing a hedge, owners and needers are generally make or take delivery of their futures contracts in fulfillment of their contract obligation. The risk a short hedger is seeking to avoid is a price increase. The basis is calculated by adding the futures price to the cash price. The pivotal point to successful hedging is understanding basis relationship. In a perfect hedge, the gain in one market nearly offsets the loss in the other.