Deposits with a specified maturity date (usually the next day or the following week) are long-term repurchase contracts. A trader sells securities to a counterparty with the agreement that he will buy them back at a higher price at a given time. In this agreement, the counterparty receives the use of the securities for the duration of the transaction and receives interest that is indicated as the difference between the initial selling price and the purchase price. The interest rate is set and interest is paid at maturity by the trader. A terminrepo is used to invest cash or to finance assets if the parties know how long it will take them. A pension contract (repo) is a form of short-term borrowing for traders in government bonds. In the case of a repot, a trader sells government bonds to investors, usually overnight, and buys them back the next day at a slightly higher price. This small price difference is the implied day-to-day rate. Deposits are generally used to obtain short-term capital.
They are also a common instrument of central bank open market operations. Securities are the subject of a specific request for the category (bonds issued by the state, the public sector, etc.), the duration and/or issuer. Issuers are safer, returns for investors are theoretically higher for certain pension transactions than for GC deposits. 2) Cash payable on the redemption of the guarantee If positive interest rates are accepted, it can be assumed that the PF redemption price will be higher than the original PN selling price. The re-board operations take place in three forms: indicated delivery, tri-party and detention (where the “selling” party maintains the guarantee during the life of the pension). The third form (Hold-in-custody) is quite rare, especially in development-oriented markets, due in part to the risk that the seller may intervene before the transaction is completed and that the buyer will not be able to recover the guarantees issued as collateral for the transaction. The first form – the indicated delivery – requires the delivery of a predetermined loan at the beginning and maturity of the contract. Tri-Party is essentially a form of trading basket and allows a wider range of instruments in the basket or pool. In the case of a tripartite repurchase transaction, a third-party agent or bank is placed between the “seller” and the buyer.