Use the opportunity to receive funding by selling the securities to the bank and repurchasing them later.
Repo is the sale of securities with an agreement to repurchase these securities at a certain date in the future. The repurchase price of securities includes an interest rate for using of the received funds.
Repo transaction allows the client to borrow money against the sold securities while keeping the rights to repurchase these securities.
Please note that:
Repo transactions are associated with a risk for a client to suffer losses and will not be suitable for all investors. In the result of the transaction, the amount of client’s liabilities may exceed the amount of the client’s investments due to client’s obligation to pay the bank the previously agreed repurchase price regardless whether the market value of the securities has decreased or increased. If a client purchases securities with a partial bank’s financing and simultaneously enters into a repo transaction regarding the same securities, the amount of client’s liabilities from this repo transaction may significantly exceed the amount of client’s investments in the securities.