The overnight stock exchange is a simple and secure financial operation in the market
For the investor, they are a unique short-term placement option, guaranteed and with attractive rates. For those who need credit, it offers an excellent financing alternative.
Benefits of operating overnight stocks exchanges
You can place bonds from one day in advance.
You know the interest rate in advance.
The operation is guaranteed by the market.
It is a credit operation. The terms of these operations, which can be carried out in pesos or dollars, range from 1 to 120 days. However, the terms with the highest volume are usually less than 30 days (in particular, between 1 and 7 days).
The placing and taking bond. The first is that the investor who owns the cash lends money to the borrower and obtains a return (this rate is negotiated in the market) for lending it over a certain period. While in the taking surety, the taker (who needs financing) borrows money and delivers financial assets as collateral for that amount. At its maturity, he returns the principal and pays the interest to the underwriter, and recovers the assets given as collateral. It is a forward operation, consequently, guaranteed by the market (BYMA).
The benefit for the investor - that is, his return - will arise from the difference between the amount he invests at the beginning of the operation and what he will receive at the end of the term. Specifically, the pre-established interest rate. Given the characteristics of the operation, the risks are very limited, as a result of the fact that if the guarantor does not pay, the collateral assets are liquidated.
The guarantee is made up of securities. They can be local and foreign public securities (bonds and bills) (US TBills and TNotes), and private securities (shares and cedars) and even shares of common investment funds (FCIs). It is important to note that the bond does not imply a change of ownership of the titles, but rather their immobilization for a certain period of time. If during the term of the bond the security makes payments of dividends or other concepts, the original owner will be the one who enjoys these benefits. Link to the list of species accepted as peso guarantee: https://www.byma.com.ar/wp-contentuploads/2022/12/BYMA-ANEXO-III-3572-16-12-2022-Nuevas-Listas-Total. pdf Link to the list of species accepted as dollar collateral: https://www.byma.com.ar/wp-content/uploads/dlm_uploads2022/05/BYMA-Anexo3567-Lista-Caucion-en-USD-21-10-2022 .pdf Link to the list of foreign species accepted as collateral https://www.byma.com.ar/wp-content/uploads/2022/12/BYMA-Lista-Treasuries-Publicacion-16-12-2022.pdf
The capacity is a percentage (less than 100%) that the market - in particular, BYMA - establishes and applies to the valuation of the assets transferred as collateral. That is, the species under guarantee is “secured” in a certain percentage, until the corresponding amount of money is covered. This guarantee is updated daily based on market quotes.