What it is:
A cage is a department in a brokerage firm.
How it works (Example):
The cage is a physical location in which people at a brokerage firm handle physical securities and certificates. The location is called a cage because it usually has bars or other barriers to prevent other people from entering and exiting, and it usually has a vault.
Why it Matters:
The cage is a crucial part of any brokerage firm's operations because it ensures that clients' physical certificates are kept safe and sound, and that the right securities are exchanged in transactions.