Common use of Buy/Sell Back and Sell Clause in Contracts

Buy/Sell Back and Sell. Buy Back Transactions‌ While a repo or reverse repo is technically a single transaction, a buy/sell back and a sell/buy back is a pair of transactions: in effect, a buy and a sell, or vice versa. Although this transaction is not a repo, it mirrors the economic effects of a repo. It is a structure where the spot and forward trades are executed at the same time using a cash rate to derive the forward yield from the spot yield. If a buy/sell back is open over a coupon date the return value is reduced by the coupon accrual value and its associated interest accrual. An example of a buy/sell back would be where counterparty A buys from and then sells to counterparty B. Buy/Sell backs are covered in the GMRA if the buy/sell back annex is included or attached.

Buy/Sell Back and Sell. Buy Back Transactions‌ Transactions While a repo or reverse repo is technically a single transaction, a buy/sell back and a sell/buy back is a pair of transactions: in effect, a buy and a sell, or vice versa. Although this transaction is not a repo, it mirrors the economic effects of a repo. It is a structure where the spot and forward trades are executed at the same time using a cash rate to derive the forward yield from the spot yield. If a buy/sell back is open over a coupon date the return value is reduced by the coupon accrual value and its associated interest accrual. An example of a buy/sell back would be where counterparty A buys from and then sells to counterparty B. Buy/Sell backs are covered in the GMRA if the buy/sell back annex is included or attached.