Seller of Repo:

• Need to borrow cheap money
• Avoid custodian interest
• Can’t pay for delivery (product hasn't been sold)
• Put up bonds as collateral
• Pay back money+interest
• Security ownership doesn't change

Buyer of Repo:

• Want to lend money very safely and in very short term basis
• Want extra income for money that is otherwise sitting around
• Need bonds to cover short

Reverse Repo

• Exact security needed

Repo failure to deliver security

• Usually no penalty as seller of repo holds on to money longer with no added interest

Seller of Dollar Roll:

• Borrow money
• Can’t take pool delivery
• Sell TBA and buy it back

Buyer of Dollar Roll

• Lend money for income
• Not enough pool to deliver

Sell/Buy Back : equivalent to class Repo

Buy/Sell Back : equivalent to reverse Repo

• Structured as two transactions instead of one
• Receiver of security has ownership right and coupons