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Reverse repo

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Published: 22nd February 2010 by William Webster

There are two parties to a repurchase transaction (repo). The party that provides (sells) the collateral is doing a repo. The party that takes (buys) the collateral is doing a reverse repo. Let's see this in a diagram:

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Learn about the following: How repo works. The terms used in repo transactions. The repo rate and why it changes. The risks of doing repo. How some risks can be reduced. How repo trades can be used.