Overview
- Explains the concept of securities lending and repos
- Offers strategies on how to realize a risk-free surplus return
- Describes the relationship between valuation and security lending
Part of the book series: SpringerBriefs in Finance (BRIEFSFINANCE)
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Table of contents (6 chapters)
Keywords
About this book
The aim of this book is to present different manifestations and conventional transactions with securities lending and repos. Securities lending as a way of short selling is not only suitable for hedging cash market positions, it is also an essential prerequisite for valuing options on the futures market. Their valuation according to the option price theory is theoretically not possible without securities lending. If, at the same time, no derivatives are traded on the market as a substitute, the valuation of a portfolio of cash and futures market positions is difficult to practice. This is unacceptable for the annual financial statements of banks, insurance companies and other capital collection agencies. With securities lending and repos, returns can be achieved with selected strategies that are above the risk-free interest rate for corresponding maturities. Market participants use differential arbitrage and compensatory arbitrage with different interest rates and premiums on the market to achieve excess returns. This is not pure short selling. Interest rates and premiums in the market should theoretically strive towards equilibrium through these transactions. Market participants thus promote market efficiency, and the resulting changes in premiums and interest rates benefit all market participants. This book targets finance professionals working in capital markets and wanting to expand their knowledge of the topic.
Authors and Affiliations
About the author
Dr. Ralf Hohmann has extensive experience in financial management and works in consulting. He regularly publishes texts on the finance and banking industry.
Bibliographic Information
Book Title: Securities Lending and Repos
Book Subtitle: Instruments and Strategies for Excess Return
Authors: Ralf Hohmann
Series Title: SpringerBriefs in Finance
DOI: https://doi.org/10.1007/978-3-658-41984-4
Publisher: Springer Wiesbaden
eBook Packages: Economics and Finance, Economics and Finance (R0)
Copyright Information: The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2023
Softcover ISBN: 978-3-658-41983-7Published: 02 August 2023
eBook ISBN: 978-3-658-41984-4Published: 31 July 2023
Series ISSN: 2193-1720
Series E-ISSN: 2193-1739
Edition Number: 1
Number of Pages: XV, 41
Number of Illustrations: 14 b/w illustrations
Topics: Capital Markets, Financial Services, Macroeconomics/Monetary Economics//Financial Economics