Prime Brokerage Cost of Carry
Financing costs vary continuously across stocks, geographies, and prime broker facilities. 3forge calculates real-time cost of carry for every position across all prime broker relationships, enabling portfolio managers to understand the true cost of each position and optimize financing decisions continuously throughout the day.
The Challenge
Most Portfolio Managers Don't Know Their True Financing Cost Until End of Day
Prime broker financing rates change without notice, vary by stock and borrow demand, and differ across counterparties, and by the time daily reports surface the cost, optimization opportunities have passed.
Opaque and variable financing rates
Prime broker financing rates change without advance notice and vary by stock, borrow demand, and relationship, and most PMs discover the cost impact in their end-of-day P&L rather than in real time.
Multi-prime-broker complexity
Managers with multiple prime broker relationships face different rates at each PB for the same positions, and optimizing financing requires comparing costs across all relationships simultaneously.
Hard-to-borrow rate spikes
Borrow rates for hard-to-borrow securities can spike significantly intraday, and by the time daily reports surface the change, the P&L impact has already accumulated.
P&L drag attribution
Understanding which positions are creating the most significant financing burden requires connecting rates to position sizes and holding periods, a computation most risk systems do not perform continuously.
The 3forge Approach
Continuous Cost of Carry Calculation Across All Positions and Prime Brokers
3forge connects to prime broker financing rate feeds and position systems to compute cost of carry for every position continuously, publishing updated financing costs to portfolio managers as rates change and positions accumulate throughout the day.
Key Capabilities
What You Can Build with 3forge
Real-Time Cost of Carry
Calculate financing cost for every position continuously as prime broker rates update throughout the trading day, with no end-of-day surprises.
Multi-PB Comparison
Compare financing costs for each position across all prime broker relationships simultaneously to identify where switching facilities would reduce costs.
Hard-to-Borrow Monitor
Track borrow rates for hard-to-borrow positions in real time with configurable alerts when rates spike above defined thresholds.
P&L Financing Drag
Attribute financing cost to strategy, sector, and individual position, surfacing which positions create the most significant carry burden on net returns.
Optimization Flagging
Automatically surface positions where financing could be moved to a cheaper prime broker facility without disrupting the investment strategy.
Historical Rate Analysis
Maintain a history of financing rates by security and prime broker to support cost trend analysis and counterparty negotiation leverage.
Get started
Ready to see it live?
Book a 30-minute demo with a 3forge solutions engineer and see real-time cost-of-carry calculations running across your positions and prime broker relationships.