Bond Education | Glossary
Close-Out (Buy-In)
A procedure that allows dealers to complete a delivery of securities they have bought but not yet delivered. Firms can agree to cancel a trade or take a substitution if all parties agree. If bonds are not delivered by the close out date and no further arrangements have been agreed upon, then the purchasing party can buy bonds in the open market to complete the transaction at the expense of the party failing to deliver the bonds.