What is the difference between a broker and a prime broker?

A broker facilitates the trading of securities, such as the buying or selling of stocks for an investment account. A prime broker, instead, is a large institution that provides a multitude of services, from cash management to securities lending to risk management for other large institutions.

What is a prime brokerage agreement?

A prime brokerage agreement is an agreement between a prime broker and its client that stipulates all of the services that the prime broker will be contracted for. It will also lay out all the terms, including fees, minimum account requirements, minimum transaction levels, and any other details needed between the two entities.

What are prime brokerage services?

Furthermore, traditional and crypto prime brokerage services include cash management, securities lending, custodian services, and settlement services. The prime brokerage meaning implicates a bundle of services big investment companies offer to their hedge-fund clientele.