A double transaction, also known as a simultaneous transaction, is made up of two sales linked in opposite directions. That is, they are hired at the same time but have moments of liquidation different. For the client who buys the securities in the first transaction of the double operation, it is then a temporary acquisition, while for his counterpart it is a temporary assignment.
These double operations have a great utility and is that they allow covering short portfolios of public fixed income, since in the operation the availability of the title of fixed rent, with simultaneous purchases (double operation). All this is done in this way because banks cannot “sell”, that is, put themselves in a short position (this means that declines in bag, which means selling an asset that we have not bought before) in a fixed income operation without having the security available. So you buy double trades for short periods of time to get this title. Therefore, one of the purposes of the short operation is that entities can take short positions at their trading desks. treasury.
Difference between simultaneous trades and repo trades
These operations are usually always differentiated with the repo operations. These can only be used with clients, and do not allow the transmission of the title, since they are configured to avoid the risk of counterparty. So, the double or simultaneous operation, and the repo, are financial operations which consist of the purchase / sale of securities, but with the promise to buy back / resell them after a time, that is, two operations of the opposite sign are carried out with different execution dates. These operations are usually used in short periods of time, in which they are normally traded financial assets short-term (government bonds, bills or obligations).