Repo Financing Quant Interview Guide
Repo financing quant interview guide covering repo basics, collateral, haircuts, specialness, carry, funding risk, and examples.
Candidates discussing funding, leverage, collateral, and bond trades.
Repo is collateralized financing
In a repo, one party sells a security and agrees to repurchase it later, economically borrowing cash against collateral.
Haircuts and rates shape leverage
The haircut determines how much cash can be borrowed against collateral. The repo rate affects carry and trade profitability.
Concrete example
A bond relative-value trade may look attractive before financing, but a higher repo rate or larger haircut can reduce or eliminate expected carry.
Special collateral changes economics
A security that is hard to borrow may trade special in repo, affecting financing rates and the economics of cash-futures or relative-value trades.
Common mistakes
Candidates often analyze bond trades without funding. Repo, collateral, liquidity, and margin can be central to fixed-income risk.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.