open repo(redirected from Open Repos)
A repurchase agreement with no definite term. The agreement is made on a day-to-day basis, and either the borrower or the lender may choose to terminate. The rate paid is higher than on overnight repo and is subject to adjustment if rates move.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A practice in which a bank or other financial institution buys securities with the proviso that the seller repurchases the same securities for an agreed-upon price on an unspecified day. Because the date is unspecified, either party could end the arrangement at any time. Investors and financial institutions do this in order to raise short-term capital. Interest rates are higher on open repos than on overnight repos to compensate for the uncertainty on how long the arrangement will last.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
A repurchase agreement without a fixed term.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.