Prime brokerage transactions
The classic prime brokerage transactions, illustrated in the panel:
- Physical long: A physical long position financed with a margin loan.
- Physical short: A physical short position created by selling a stock borrowed under a stock loan.
- Synthetic long: A “synthetic” economic equivalent of a physical long position created by entering an equity derivative as a Floating Amount Payer.
- Synthetic short: A “synthetic” economic equivalent of a physical short position created by entering an equity derivative as a Equity Amount Payer.
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Hedge Funds & Prime Brokerage Anatomy™
 The classic stock loan, yesterday
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