Posted in Finance, Accounting and Economics Terms, Total Reads: 269
Definition: Prime of Prime (POP)
A brokerage which gives services to trader(s) (especially traders dealing in Forex) who are in need of micro-contract trades. Prime of Prime (PoP) brokerage often allows for trades of bigger leverage and, therefore, more risk. Many of the brokers who use PoP brokerages are tiny regional banks with clients who need small trade options for currency.
One of the important reason that normal forex prime brokerages do not provide the services that the Prime of Prime do is that there is a very small margin in the smallr trades. Also, their systems often do not support a economic way to complete small trades. PoP brokerage is also equipped to handle the increasing requirements for the high leveraged trades.
These type of brokerage do not give high profits per transaction because of lower margins.