5 ms·

as a developer, the use of `repo` in the title confused me for a bit

• arthurcolle 7y ago
  In the financial domain, repo refers to repurchase agreements. You pledge some bit of collateral to receive a short-term loan that is cheaper than other forms of short-term lending, (usually as a funding mechanism for your daily trading activity, at least for bulge bracket investment banks), and then you pay back what you borrowed and you receive your collateral back. The opposite is captured with “reverse repurchase agreements” which is exactly what I described, with the roles inversed. It is actually quite interesting, but doesn’t come up frequently in daily personal finance much at all.