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The word repo refers to the repurchase agreements that govern this market. Essentially it is a collaterized loan. The repo market allows banks and investors to exchange high-quality assets, usually US government bonds, for cash funding. Borrowers then repurchase the assets for a slightly higher price at an agreed date, usually the next day, creating a short-term loan. The market lets banks meet their short-term funding needs and is essential for the smooth operation of the dollar-based financial system. Market activity is concentrated between 7:00 and 8:30 am EDT and the NY FED actively monitors and intervenes in the market.
Reference: Triparty-Repos by the NY FED, this describes the Repo Market, the terms and risk associated with it and the various calculations and formulae that govern the yield calculation, not just tri-party.
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Time between Opening and Closing legs is usually a day or two. This is the term of the repo. If the term of the repo is overnight, it is called an overnight; everything else is called a term repo. Term repos are more complicated due to margin calls. The observed price of the security rises or falls, there may be margin calls to preserve the haircut.
Closing leg:
Breaking NewsNews: In the last week of September of 2019 there was a huge problem in the repo market. ON On Sept 23. lenders disappeared from the market, leaving many who wanted short term funding without takers; this created a huge spike in the overnight and term rates. The commotion was quelled only when the NY FED stepped in providing liquidity in the market. Speculation abounds as to the root cause.
Some have been mentioned: High LCR (Liquidity Coverage Ratio) requirement from big banks (JPM, Citi, Wells, BOA) hold 300+ billion dollars in cash (total held at Fed is $1.3 Trillion). This drains cash from short term lending market, especially since these big banks are dealers and market makers.