What is a prime brokerage?

A prime brokerage is a bundled group of services that investment banks and other financial institutions offer to hedge funds and other large investment clients. They often need to be able to borrow securities or cash to engage in netting, which offsets the value of multiple positions or payments exchanged between two or more parties.

What does a prime broker do?

A broker is an individual or entity that facilitates the purchase or sale of securities, such as the buying or selling of stocks and bonds for an investment account. A prime broker is a large financial institution that provides a multitude of services, from cash management to securities lending to risk management for other large institutions.

Why should you choose a prime brokerage account?

Now, prime brokerage accounts offer services like securities lending and leverage trading. Prime brokerage helps manage big, varied portfolios well. Clients with these accounts get special services. This makes managing big financial operations easier. These services improve liquidity and give clients a strategic edge.