Open repo

A repo that does not have a specified fixed maturity date is known as an open repo. In an open repo the borrower of cash will confirm each morning that the repo is required for a further overnight term. The interest rate is also fixed at this point. If the borrower no longer requires the cash, or requires the return of his collateral, the trade will be terminated at one day s notice. 

Among these databases, several small-sized compound databases are freely available (excluding shipping costs) to academics from NCI/DTP (http //dtp.nci.nih.gov/branches/dscb/ repo open.html) upon project approval and could be a good starting point for different projects. 

DBV repo is a repo transaction in which the delivery of the securities is by the DBV mechanism in CREST. A series of DBV repos may be constructed to form an open or term DBV repo. The DBV functionality allows repo interest to be automatically calculated and paid. 

This is the open market in gilt repo. A market in equity repo, for instance, had heen in operation in the London market from around 1992. 

Central banks are able to use repo in their open market operations. 

Financial institutions will engage in both repo and reverse repo trades. Investors also, despite their generic name, will be involved in both repo and reverse repo. Their money market funds will be cash-rich and engage in investment trades at the same time they will run large fixed interest portfolios, the returns for which can be enhanced through trading in repo. Central banks are major players in repo markets and use repo as part of daily liquidity or open market operations and as a tool of monetary policy. 

The repo counterparty delivers to the reverse repo counterparty 10 million nominal of the stock, and in return receives the purchase proceeds. The clean market price of the stock is 104.60. In this example no margin has been taken so the start proceeds are equal to the market value of the stock which is 10,505,560.11. It is common for a rounded sum to be transferred on the opening leg. The repo interest is 5.75%, so the repo interest charged for the trade is... 

The term of a stock loan can be fixed, in which case it is known as a term loan, or it can be open. A term loan is economically similar to a classic repo transactions. An open loan is just that there is no fixed maturity term, and the borrower will confirm on the telephone at the start of each day whether it wishes to continue with the loan or will be returning the security. 

---