The cash leg of a repo transaction is the original purchase price paid by the lender (cash payer) to the borrower (cash taker) against the securities (repo collateral). This repo leg constitutes the front leg of a repo– i.e., the delivery of collateral assets/ repo collateral (securities) against payment of an amount of money (the face value of the securities, which is the amount of loan). An front leg is the first leg of a repo (repurchase agreement, RP) that is carried out in order to initiate the transaction.

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).