How to buy and sell treasury bond reverse repurchase
Treasury bond reverse repurchase is a short-term capital lending tool. Investors earn interest income by selling Treasury bonds and buying them back at a slightly higher price at an agreed time. The following are the hot topics and operation guides on the reverse repurchase of government bonds across the Internet in the past 10 days.
1. Basic concepts of government bond reverse repurchase
Treasury bond reverse repurchase (Reverse Repo) is a transaction method in which investors lend funds, use treasury bonds as collateral, and recover the principal and interest at maturity. Its characteristics areLow risk, high liquidity, suitable for short-term idle fund management.
| Key terms | explain |
|---|---|
| Repurchasing | The borrower uses government bonds as collateral for financing |
| reverse repo | Lenders of funds receive fixed income |
| GC001/R-001 | 1-day treasury bond reverse repurchase code (Shanghai Stock Exchange) |
2. Detailed explanation of operating steps
1.Open permissions: Bond trading permission needs to be opened at the brokerage (usually enabled by default).
2.Select variety: The exchange provides multi-term varieties such as 1 day (GC001), 2 days (GC002) to 182 days.
| trading market | code prefix | minimum threshold |
|---|---|---|
| Shanghai Stock Exchange | GC | Starting from NT$100,000 |
| Shenzhen Stock Exchange | R- | Starting from 1,000 yuan |
3.Place an order: Select "Sell" through the trading software (because you are the fund lender), enter the code, price (annualized interest rate), and quantity.
4.Settlement on maturity: The principal and interest are automatically credited to your account, no manual redemption is required.
3. Income calculation and techniques
| Interest accrual days | Calculation formula | Example (100,000 yuan, interest rate 3%) |
|---|---|---|
| T+0 transaction | Interest = principal × interest rate × number of days/365 | 100000×3%×1/365≈8.22 yuan |
| before holidays | Actual occupancy days may be extended | You can get 3 days of interest if you operate a 1-day period on Thursday |
4. Recent hot topics and matters needing attention
1.End of month/end of quarter effect: Interest rates may soar when funds are tight, and the 7-day reverse repurchase rate recently exceeded 5%.
2.handling fee: Brokers usually charge 0.001%-0.03% of the transaction amount.
3.Risk warning: Although the collateral is treasury bonds, attention needs to be paid to the counterparty default risk (very low probability).
5. Comparison with other financial management
| product type | annualized income | Liquidity | risk level |
|---|---|---|---|
| Treasury bond reverse repurchase | 2%-5% | T+0 arrival | R1 |
| money fund | 1.5%-2.5% | T+1 | R1 |
| Bank financial management | 3%-4% | closed period | R2 |
Summary: Treasury bond reverse repurchase is an ideal choice for short-term idle funds, especially when market interest rates rise, the returns are significant. Investors can easily participate through trading software and flexibly choose varieties from 1 day to half a year to achieve steady appreciation of funds.
check the details
check the details
en
