under the terms and conditions set out in the electronic notice and (if applicable) the terms and conditions of such transaction contained in the ITRIT Regulations. In addition to using repo as a financing tool, repo traders „make markets“. These traders have traditionally been called „book backpo correspondents“. The concept of a matched book transaction closely follows that of a broker who takes both sides of an active trade and essentially has no market risk, but only credit risk. Elementary paired book traders engage in both reverse and reverse repo in a short period of time and reap the benefits of the bid-seller gap between reverse reverse reverse repo and the repo price. Currently, matched book repo traders use other winning strategies, such as. B incompatible maturities, collateral swaps and liquidity management. Although the purpose of repo is to borrow money, it is not technically a loan: ownership of the securities in question comes and goes between the parties involved. Nevertheless, these are very short-term transactions with a buy-back guarantee. The value of the guarantee is generally higher than the purchase price of the securities. The buyer undertakes not to sell the securities unless the seller is in default with his share of the contract. On the contractually agreed date, the seller must purchase the securities, including the agreed interest or reversal rate.
Specifically, in a deposit, Party B acts as a cash lender, while Seller A acts as a cash borrower and uses the collateral as collateral; in a reverse deposit, (A) is the lender and (B) is the borrower. The legal right to the guarantees is transferred from the seller to the buyer and returns to the original owner when the contract is concluded. .