[uhn-wahynd] 
verb, -wound, -wind⋅ing.| 1. | to undo or loosen from or as if from a coiled condition: to unwind a rolled bandage; to unwind a coiled rope. |
| 2. | to reduce the tension of; relax: to unwind a person with a drink. |
| 3. | to disentangle or disengage; untwist: to unwind one's legs from around the stool. |
| 4. | to become unwound. |
| 5. | to become relieved of tension; relax: After work we can have a drink and unwind. |
unwind
To close out a relatively complicated investment position. For example, an investor who practices arbitrage by taking one position in stocks and the opposite position in option contracts would have to unwind by the date on which the options would expire.
To rectify a transaction in which a mistake has been made. For example, because of a misunderstanding, a brokerage firm may have bought the wrong stock for a customer. The firm must then unwind the erroneous trade by selling the stock just purchased and buying the correct stock.
