Security Finance

Encyclopedia : S : SE : SEC : Security Finance

Using securities as collateral for a loan. Either one has securities and wants cash or one has cash and wants securities. Or, one has securities and wants other securities. The terms of the loan are governed by a (repurchase agreement) (Repo). Can be used to obtain securities to sell short, transfer beneficial ownership for tax purposes, or settle trades when a broker does not have the security in the inventory.

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