Repo vs. Reverse Repo: An Overview
The repurchase agreement (repo or RP) and the reverse repo agreement (RRP) are two key tools used by many large financial institutions, banks, and some businesses. These short-term agreements provide temporary lending opportunities that help to fund ongoing operations. The Federal Reserve also uses the repo and RRP as a method to control the money supply.1
Essentially, repos and reverse repos are two sides of the same coin — or rather, transaction — reflecting the role of each party. A repo is an agreement between parties where the buyer agrees to temporarily purchase a basket or group of securities for a specified period. The buyer agrees to sell those same assets back to the original owner at a slightly higher price using a RRP.
Both the repurchase and reverse repurchase portions of the contract are determined and agreed upon at the outset of the deal.
Repo vs. Reverse Repo: An Overview The repurchase agreement (repo or RP) and the reverse repo agreement (RRP) are two key tools used by many large financial institutions, banks, and some businesses. These short-term agreements provide temporary lending opportunities that help to fund ongoing operations. The Federal Reserve also uses the repo and RRP as a method to control the money supply.1
Essentially, repos and reverse repos are two sides of the same coin — or rather, transaction — reflecting the role of each party. A repo is an agreement between parties where the buyer agrees to temporarily purchase a basket or group of securities for a specified period. The buyer agrees to sell those same assets back to the original owner at a slightly higher price using a RRP.
Both the repurchase and reverse repurchase portions of the contract are determined and agreed upon at the outset of the deal.
(from Investopedia)
So conspiring with another entity to artificially inflate the price, and the volume.