标题: Reading 30--Fixed part Two [打印本页] 作者: andytrader 时间: 2013-4-8 17:09 标题: Reading 30--Fixed part Two
Question:
Availability of collateral is limited, why will resulting into the repo rate to be lower?
Is that indicate the lower liquidity of collateral, the lower the repo rate?作者: jcole21 时间: 2013-4-8 17:09
The collerateral’s availablity is limitied. I.e. There ain’t a lot of these out there - but some people need it for some weird reason (e.g. cover a short). If he cannot borrow it from you, he’ll have to buy it back at an inflated price (short squeze). So, you are there at the other side of the table and what does your negociation power look like? Pretty good, right?
