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Buy-in: Difference between revisions
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Amwelladmin (talk | contribs) (Removed redirect to Buy-In - GMSLA Provision) Tag: Removed redirect |
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{{a|contract|}}{{d|Buy-in|/baɪ ɪn/|n|}}A [[self-help remedy]] in the securities markets where a market counterparty is unable to perform its obligations to deliver securities under an existing transaction, such as a securities sale or a [[stock loan]]. Since the selliung counterparty is failing to pony up what it owes — and by the way this may not be the counterparty’s fault: it may be the wrong end of an upstream fail, or there may be a general market dislocation — the buyer takes matters into its own hands and “buys in” from another source to satisfy its own requirements. | {{a|contract|}}{{d|Buy-in|/baɪ ɪn/|n|}} | ||
A [[self-help remedy]] in the securities markets where a market counterparty is unable to perform its obligations to deliver securities under an existing transaction, such as a securities sale or a [[stock loan]]. Since the selliung counterparty is failing to pony up what it owes — and by the way this may not be the counterparty’s fault: it may be the wrong end of an upstream fail, or there may be a general market dislocation — the buyer takes matters into its own hands and “buys in” from another source to satisfy its own requirements. | |||
This has two consequences: firstly — assuming the buy in settles — the buyer no-longer needs the securities it originally bought from the failing seller. So the failing seller is stuck with these. Secondly, the ''price'' at which the buyer executes the buy-in transaction will almost certainly differ from price agreed for the original failed trade. The buyer can pass its loss on to the failing seller. | This has two consequences: firstly — assuming the buy in settles — the buyer no-longer needs the securities it originally bought from the failing seller. So the failing seller is stuck with these. Secondly, the ''price'' at which the buyer executes the buy-in transaction will almost certainly differ from price agreed for the original failed trade. The buyer can pass its loss on to the failing seller. | ||
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*[[Securities financing transaction]] | *[[Securities financing transaction]] | ||
*{{gmslaprov|Buy-in}} under the {{gmsla}} | *{{gmslaprov|Buy-in}} under the {{gmsla}} | ||
*{{gmraprov|Buy-in}} under the {{gmra}} | |||
{{ref}} | {{ref}} | ||