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{{anat|PB | {{anat|PB|}}''This article is largely about equity [[prime brokerage]], because that’s mainly what the [[JC]] knows about.'' <br> | ||
[[Prime brokerage]] is, first and foremost, a ''financing'' business. A [[prime broker]] [[margin loan|lends money on margin]] to [[hedge fund]]s so they can invest in the market. It can do this directly, by making cash or stock loans, or “[[Synthetic equity swaps|synthetically]]”, using swaps, but either way the PB does not have any market risk on its client’s positions. It makes its money through commissions and optimising its [[cost of funding]]. | [[Prime brokerage]] is, first and foremost, a ''financing'' business. A [[prime broker]] [[margin loan|lends money on margin]] to [[hedge fund]]s so they can invest in the market. It can do this directly, by making cash or stock loans, or “[[Synthetic equity swaps|synthetically]]”, using swaps, but either way the PB does not have any market risk on its client’s positions. It makes its money through commissions and optimising its [[cost of funding]]. | ||