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Overlock yarn is used to finish, also known as linking, fabrics that tend to fray, as these will otherwise fray down to the seam after a few wears or washes and then become visible as holes in the seams. It is thinner than normal sewing thread - and still very tear-resistant.
Because overlock and cover seams need a lot more thread than seams with a household sewing machine, Ovi threads are available in stores on large cones. There is also a reason why the thread itself is finer than a standard general sewer: the seam is worked with up to 4 threads. If the thread were thicker, the seam would be bulky. And that feels uncomfortable when wearing the clothes. And it also doesn't look good, especially with tight-fitting clothing.
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