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Synthetic Prime Brokerage

A service that provides clients with the financial exposure of trading assets without them having to actually buy and own the underlying securities.

Synthetic Prime Brokerage allows investors to gain exposure to the price movements of stocks, bonds, or other assets through derivative contracts, such as total return swaps. In this arrangement, the broker holds the actual physical securities, and the client enters into a contract that replicates the economic performance of those assets.

Clients utilize synthetic prime brokerage primarily for its capital and operational efficiency. It enables them to take large market positions while often requiring less upfront capital than traditional cash trading. Additionally, it simplifies the operational burden, as the broker manages the settlement, custody, and corporate actions associated with the underlying physical assets.

This service addresses the need for sophisticated investors to access global markets, manage their balance sheets efficiently, and execute strategies that might be restricted or more costly in physical markets.