Synthetic prime brokerage: Difference between revisions

Synthetic prime brokerage (view source)

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 }}''Also called [[synthetic equity swap]]s, [[contracts for difference]]<ref>This has been apt to confuse people; be warned.</ref> or [[high-delta equity derivative]]s.''
-Why are all these things called “[[synthetic prime brokerage]]”, then? Well because economically this is ''physical'' [[prime brokerage]] — that is, equity brokerage done on [[margin lending|margin]] only done with [[swaps]] and not investments in actual shares. The client never actually owns the [[share]]: instead, his [[swap dealer]] buys it, and passes on the economic return.
+Why are all these things called “[[synthetic prime brokerage]]”, then? Well, because economically this is ''physical'' [[prime brokerage]] — that is, [[Brokerage|equity brokerage]] done on [[margin lending|margin]] only done with ''[[swaps]]'' on [[shares]], and not ''actual'' [[shares]]. The client never actually owns the [[share]]: instead, his [[swap dealer]] buys it, and passes on the economic return under an [[equity derivative]].
 You may like our longer-form essay — it’s a contrarian piece, be warned —  ''“[[synthetic prime brokerage and the risk of tax recharacterisation]]”''.