Hi,You would never actually outright "sell" the bond on the market. Most of these kind of short selling transactions are done via repo / rev repo because they are much cheaper than taking an outright position.In any case, you would effectively take out a loan of 100 from Bank A at x% interest and loan that money via rev.repo (you take bond give cash) at x.x% to Bank B who gives you an (as an example) on-the-run US Treasury note as collateral. You would then "short" this bond by repo'ing (you receive cash give bond) at x.xx% to Bank C. You would then use the cash from the repo with Bank C to settle the initial loan with Bank A and pay the accrued interest. If you don't roll with Bank B or C, then you effectively receive the money back from Bank B and pass it on to Bank C and return the bond from Bank C to Bank B. Whatever proceeds .x% (hopefully..) remain after you net the cash flows is your profit (or loss) out of the transaction. These kind of arbitrage deals are normal in repo markets. You can realize these transactions with CCP's seeing as their repo rates tend to be a lot different then market rates.One further comment here: as long as you can keep rolling the trade with Bank B and C, you should be able to realize whatever positive carry you hope to as long as the market conditions stay in your favor. If the market moves to your disfavor then you either have to carry the loss till the next roll period and unwind both positions and then look to somehow restructure the deal so that the new level is taken into account.CB