U.S. Futures Customers Pulled $10 Billion Out of the Futures Market

As many know, the CFTC publishes a list of U.S. futures commission merchants (FCMs) and the amount of customer money they have in their Segregated U.S. Funds bank balances. Today they published the list for month-end July, 2012, to their website.

The CFTC report comes from the FCM’s CFTC 1-FR reports, which are part of the SEC FOCUS report if the FCM is also a broker/dealer in U.S securities. If the FCM is not also a broker/dealer registered with the SEC, then they submit just the 1-FR to CFTC.

Here is the latest report from CFTC: Latest CFTC Report

Here is the same list, sorted by FCMs’ Customer Segregated Funds balances. fcmdata0712-sorted-by-Seg

There is a lot of interesting information and data in the report: RJ O’Brien is the largest FCM in the U.S. as measured by Customer Seg, that is not also an SEC-registered broker/dealer in U.S. securities, for example. Another example: 8 of the top 10 names on the list all use the same vendor back-office system. There are 69 FCMs that reported Customer Seg to SEC and/or CFTC. (There were 71 as-of last October, when MF Global turned on their money vaporizer; there were 70 until Peregrine went down.)

But that’s not the most interesting thing to me. To me, the most revealing thing about the current report is this: In June of 2011, 13 months ago, FCMs in the U.S. reported a cumulative $153,881,560,188.00 in Customer Segregated Funds. (I used the CFTC report from that date to generate this post, where the data was sorted: June 2011 Sorted Data.

Today’s report from CFTC shows a cumulative Customer Seg figure of $143,561,983,577.00.

That means that customers of U.S. FCMs have pulled $10,319,576,611 out of their FCMs in the past 13 months of CFTC reporting.

Even if one assumes that MF Global lost/stole/vaporized $1.6 billion and that Russ Wasendorf at Peregrine stole another $200 million, there is still a full $8 billion-plus that customers of FCMs took out, entirely on their own.

FCM customers have options: ETFs, mutual funds, stocks (with SIPC protection), etc. It looks like many are utilizing the options, and departing the futures industry.

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2 Responses to “U.S. Futures Customers Pulled $10 Billion Out of the Futures Market”

  1. US Futures Customers Pulled $10 Billion Out of the Futures Market | MF Global UK Clients Says:

    […] Needham Consulting (h/t @shortorlong) […]

  2. hanumancapital Says:

    Reblogged this on Hanuman Capital.

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