The securities leg of a repo transaction is that part relating the securities posted as collateral against the loan (the borrowed funds). The receiving party (lender or the party that receives the collateral) expects to receive the full title to the collateralized securities under a title-transfer arrangement.

In general, a repo can be perceived as a contract for the sale of a security (the collateral)- the first leg (i.e., the opening leg/ front leg)- subject to a simultaneously concluded forward agreement for the repurchase of the collateral or a similar security at an agreed date or on demand- the second leg (term leg/ return leg).