▁which ▁exam ined ▁the ▁issue . ▁ ▁Re h yp othe cation ▁in ▁repo ▁agre ements ▁Re h yp othe cation ▁can ▁be ▁involved ▁in ▁rep urchase ▁agre ements , ▁commonly ▁called ▁repos . ▁ ▁In ▁a ▁two - party ▁rep urchase ▁agreement , ▁one ▁party ▁s ells ▁to ▁the ▁other ▁a ▁security ▁at ▁a ▁price ▁with ▁a ▁commit ment ▁to ▁buy ▁the ▁security ▁back ▁at ▁a ▁later ▁date ▁for ▁another ▁price . ▁O vern ight ▁rep urchase ▁agre ements , ▁the ▁most ▁commonly ▁used ▁form ▁of ▁this ▁arrangement , ▁compr ise ▁a ▁sale ▁which ▁takes ▁place ▁the ▁first ▁day ▁and ▁a ▁rep urchase ▁that ▁revers es ▁the ▁transaction ▁the ▁next ▁day . ▁Term ▁rep urchase ▁agre ements , ▁less ▁commonly ▁used , ▁extend ▁for ▁a ▁fixed ▁period ▁of ▁time ▁that ▁may ▁be ▁as ▁long ▁as ▁three ▁months . ▁Open - ended ▁term ▁rep urchase ▁agre ements ▁are ▁also ▁possible . ▁A ▁so - called ▁reverse ▁repo ▁is ▁not ▁actually ▁any ▁different ▁to ▁a ▁repo ; ▁it ▁merely ▁describes ▁the ▁opposite ▁side ▁of ▁the ▁transaction . ▁The ▁s eller ▁of ▁the ▁security ▁who ▁later ▁rep urch ases ▁it ▁is ▁entering ▁into ▁a ▁rep urchase ▁agreement ; ▁the ▁purch aser ▁who ▁later ▁re - s ells ▁the ▁security ▁enters ▁into ▁a ▁reverse ▁rep urchase ▁agreement . ▁ ▁Not with standing ▁its ▁nom inal ▁form ▁as ▁a ▁sale ▁and ▁subsequent ▁rep urchase ▁of ▁a ▁security , ▁the ▁economic ▁effect ▁of ▁a ▁rep urchase ▁agreement ▁is ▁that ▁of ▁a ▁secured ▁loan . ▁ ▁See ▁also ▁