Prime Services and Securities Lending Course Overview
The Prime Services and Securities Lending course aims to guide you to understand how the prime services team provides specialized services to help hedge funds make money and how securities lenders facilitate the shorting of stocks. Once you get started, you will comprehend how prime services (i.e., prime brokers) attracts investors, provides leverage, maintains margin requirements, performs clearing and settlement functions, offers custodial services, and produces real-time reporting for their hedge fund clients.
Next, you will cover the securities lending function, where you will understand what securities lending is and identify key differences between short-sellers, stock lenders, and long-sellers. You will recognize how and why market participants may ‘short’ stocks. As short-selling is crucial to the stock market, we will analyze short-selling activity using multiple short equity metrics such as short interest and short interest ratio on Refinitiv Workspace screen.
Finally, as mentioned earlier, securities lenders are essential to facilitate short selling. You will examine securities lending transactions using examples with a hedge fund manager who is bearish on a stock and wants to borrow a stock to short, a securities lender who will facilitate the borrow, and a long-only asset manager who will lend the stock. In this process, you will also see the distribution of borrow fees and various security lender models.
Prime Services and Securities Lending Learning Objectives
By the end of this course, you will be able to:
- Understand what prime services is and how it fits within a bank
- Describe the range of prime services activities
- Recognize how and why market participants may ‘short’ stocks
- Comprehend how securities lending works and who are the market participants
- Calculate the cash flows involved in securities lending
Prime Services and Securities Lending Is an Elective Course of CFI’s CMSA® Program
CFI’s Capital Markets & Securities Analyst (CMSA)® program covers all the basic, intermediate, and advanced topics about sales and trading, investment banking, and asset management. This program teaches you trading strategies used in the finance and capital markets industry. It is ideal for students who want to learn how to trade different asset classes. The program is completely online, so you can take it at your own pace from anywhere in the world.
Common career paths for students who take the CMSA® are sales & trading, asset management, wealth management, treasury, risk management, and other capital markets careers.
Who Should Take This CMSA® Course?
This Prime Services and Securities Lending course is perfect for anyone looking to build a complete understanding of capital markets. This course is designed to help those interested in careers in prime services, securities lending, hedge funds, portfolio management, and other sell-side trading careers.
This course explores concepts useful for beginner and intermediate level capital markets professionals or business and finance students seeking to better understand securities lending transactions.