Financial Services - , ,
BT Prime is a Prime Brokerage (PB).What is a PB? Prime Broker = an entity that is willing to represent the brokerage in all its trading transactions and settle the trades in your name. Usually requires a security deposit. Could be automatic or manual. Examples: Barclays, FC Stone, JP Morgan, etc.For example: Imagine you have a VISA credit card from your retail bank, like Bank of America. You to a restaurant and decide to pay your bill with your credit card. On your credit card you have a line of credit of $2,000 from Bank of America. Because Bank of America needs some security you had to deposit $200 to open the account, so BofA gave you 10:1 leverage. This is comparable to Bank of America being your prime broker, VISA being the ECN, the restaurant the counterparty and you the trader in the transaction. You could use a different ECN, MasterCard, with the same Prime Broker (Bank of America). But in sum, Bank of America is charging you a fee, the ECN is charging you a fee and if you can resell the meal for more then you paid for you will make profit!
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