Common Contracts
1 similar Repurchase Agreement contracts
Commodity Futures Trading Commission § 155.2Repurchase Agreement • January 15th, 2020
agreement with Bank B. The repurchase agreement involves two separate contracts: A fixed-price sale from Elevator A to Bank B at today’s spot price; and an open-priced pur- chase agreement that will allow Elevator A to repurchase the wheat from Bank B at the prevailing spot price three months from now. Because Bank B obtains title to the wheat under the fixed-price purchase agreement, it is exposed to price risk should the price of wheat drop. It therefore decides to sell the quantity equivalent of 500,000 bushels of CBOT Wheat Referenced Contracts.
