Repo vs. Reverse Repo: An Overview
The repurchase agreement (repo or RP) and the reverse repo agreement (RRP) are two key tools used by many large financial institutions, banks, and some businesses. These short-term agreements provide temporary lending opportunities that help to fund ongoing operations. The Federal Reserve also uses the repo and RRP as a method to control the money supply.1


Essentially, repos and reverse repos are two sides of the same coin — or rather, transaction — reflecting the role of each party. A repo is an agreement between parties where the buyer agrees to temporarily purchase a basket or group of securities for a specified period. The buyer agrees to sell those same assets back to the original owner at a slightly higher price using a RRP.

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Note added at 3 hrs (2021-05-27 02:42:20 GMT)
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A direct position in an asset that is designed to be delivered immediately is known as a “spot" or cash position. Spots can be delivered literally the next day, the next business day, or sometimes after two business days if the security in question calls for it. On the transaction date, the price is set but it generally will not settle at a fixed price, given market fluctuations.