What is the difference between square off and exercise an Option?

Square off meaning: If you take the exact opposite of your previous position, this is called squaring off. Suppose your existing position is a BUY call option on Reliance. If you now SELL a put option on Reliance with the same strike price, lot size, and expiration date, you're squaring off your position. Exercising options meaning: You exercise an option if you want to buy the shares, commodities, or currencies underlying the option. It means realizing the right to buy or sell the underlying asset specified in an option contract.