Prime Brokerage


DEFINITION of 'Prime Brokerage'

A special group of services that many brokerages give to special clients. The services provided under prime brokering are securities lending, leveraged trade executions, and cash management, among other things. Prime brokerage services are provided by most of the large brokers, such as Goldman Sachs, Paine Webber, and Morgan Stanley Dean Witter.


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BREAKING DOWN 'Prime Brokerage'

Hedge funds were what started the prime brokerage option. Hedge funds place large trades and need special attention from brokerages.

  1. Hedge Fund

    An aggressively managed portfolio of investments that uses leveraged, ...
  2. Master-Feeder Fund

    A structure commonly used by hedge funds to pool investment capital ...
  3. Broker

    1. An individual or firm that charges a fee or commission for ...
  4. Rehypothecation

    The practice by banks and brokers of using, for their own purposes, ...
  5. Brokerage Account

    An arrangement between an investor and a licensed brokerage firm ...
  6. Hedge

    Making an investment to reduce the risk of adverse price movements ...
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  1. If everyone is selling in a bear market, does your broker have to buy your shares ...

    A broker won't lose money when a stock goes down because he or she is usually nothing more than an agent acting on sellers' ... Read Full Answer >>
  2. I'm new to this. Can I sell or buy stock by myself?

    In order to buy stocks, you need the assistance of a stock broker since you cannot just phone up a company and ask to buy ... Read Full Answer >>
  3. Can hedge funds trade penny stocks?

    Hedge funds can trade penny stocks. In fact, hedge funds can trade in just about any type of security, including medium- ... Read Full Answer >>
  4. Are hedge funds regulated by FINRA?

    Alternative investment vehicles such as hedge funds offer investors a wider range of possibilities due to certain exceptions ... Read Full Answer >>
  5. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  6. Can hedge fund returns be replicated?

    You can replicate hedge fund returns to a degree but not perfectly. Most replication strategies underperform hedge funds ... Read Full Answer >>

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