Penny stocks, which present potential price, volatility and liquidity risks, generally cannot be used as collateral in Margin accounts. For traders in trading companies, deposits are used to finance long positions, to have access to more advantageous financing costs for other speculative investments and to hedge short positions in securities. Learn more about the following: Here`s how the repo works. Terms used in repo transactions. The repo rate and why it changes. The risks of Repo. How to reduce certain risks. How to use repo trades.