How the big boys play with money

And make a killing until they don't-Any day now, any day now I shall be released

Some glad morning when this life is o’er, 
I’ll fly away; 
To a home on God’s celestial shore, 
I’ll fly away (I’ll fly away). 

https://www.zerohedge.com/news/2024-08-30/how-most-important-trade-earth-comes-apart

The (“going long the basis”) trade is a long/short position – long the cash Treasury, and short the Treasury futures – taken on by leveraged funds that seek to harvest the tiny spread between the two (the spread is the literal “cash-futures basis” or “basis”, hence the name). The cash Treasury is financed in the repo market, and this is where they're able to lever-up a tiny profit of singles basis points into something more worthwhile:

• 1) The hedge fund agrees to buy a Treasury in the cash market.

• 2) The hedge fund simultaneously posts that Treasury as collateral in the repo market.

• 3) The hedge fund uses the proceeds from the repo loan to finance the original purchase of the Treasury that it just bought and posted as collateral. The repo loan is for the face value of the Treasury minus a "haircut", so unless the haircut is zero, the rest of the security is financed by the hedge fund's own capital, allowing for quite dramatic leverage when the haircut is small.