回购协议也赞扬了反向回购协议。回购协议被定义为随着回购协议安全性的同时，在一个给定的证券价格销售（B. Gorton和屈，2009）。因此，回购被定义为有担保贷款，因为该贷款是作为担保的抵押品的现金。根据借款人的现金，这可以看作是反向回购或反向回购协议。反向回购基本上是回购协议的镜像。在这种情况下，购买证券的承诺，同时将转售。这是反向回购的特点，与回购协议不同。投资者利用回购和反向交易的金融证券，他们认为他们的投资以及交易账户还需做为他们帮助建立和活动基本上是为了获得满足特定客户的需要和要求实施（A. Lumpkin，1987）。
A repurchase agreement also known as “repo” is basically a financial contract used by market participants who use this financing method to meet the short and long term liquidity needs. A noteworthy point is that repurchase agreements such as derivatives do not really end up in bankruptcy of the party. A repo mainly transacts under two parts, firstly the transfer of securities by one party whether it is the bank or borrower to another party in exchange for cash and secondly it is the transaction costs of a contemporaneous agreement entered by the bank in order to repurchase the securities at the original price itself (B. Gorton and Metrick, 2009). There are no estimated statistics or figures which define what the actual size of a repo market is; therefore it can be either $12 trillion or even an amount that is compared to be somewhere around $10 trillion as per the reports shown by the U.S Banking system. The process of keeping a track on the growth of the securitized banking system can be done by comparing the figure of total assets to that of the traditional growth of assets in the investment bank. The figures shown in the growth of assets is noteworthy since it affects the repo finance rate more than the actual growth rate of securitized banking system.
Repurchase agreement is also complimented with a reverse repurchase agreement. Repurchase agreement has been defined as the selling of security along with the agreement to repurchase the same security at a given price(B. Gorton and Metrick, 2009). A repo is therefore, defined to be as a secured loan since this loan is given as cash against a security which is kept as collateral. According to the borrower of cash, this can be considered as a reverse repo or reverse repurchase agreement. Reverse repo is basically a mirror image of a repo agreement. In this case, securities are purchased with a promise that the same would be resold simultaneously. This is the feature of reverse repo unlike that of repurchase agreement. Investors use both repo and reverse transactions to finance the securities which they hold in their investment as well as trading of accounts is also required to be done as they help in establishing and implementing of activities which is basically acquired in order to meet the specific customer needs and requirements (A. Lumpkin, 1987).