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Financial Assets And Financial Liabilities | 6 Months Ended
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Jun. 30, 2014
Financial Assets And Financial Liabilities [Abstract] |
Financial Assets And Financial Liabilities | 6. Financial Assets and Financial Liabilities Fair Value The following tables set forth, by level within the fair value hierarchy (Note 2), financial assets and liabilities, primarily financial instruments owned and financial instruments sold, but not yet purchased at fair value as of June 30, 2014 and December 31, 2013. As required by ASC 820, financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the respective fair value measurement.
|  | Financial Assets At Fair Value as of June 30, 2014
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Securities segregated for regulatory purposes |  | $ | 3,427,880 |  | $ | - |  | $ | - |  | $ | 3,427,880
Financial instruments owned: |  |  |  |  |  |  |  |  |  |  |  |
Stocks |  |  | 1,151,367 |  |  | - |  |  | 260 |  |  | 1,151,627
Options |  |  | 1,072,980 |  |  | - |  |  | - |  |  | 1,072,980
Warrants and discount certificates |  |  | 34,345 |  |  | - |  |  | - |  |  | 34,345
U.S. and foreign government securities |  |  | 16,049 |  |  | 3,866 |  |  | - |  |  | 19,915
Corporate and municipal bonds |  |  | 91,243 |  |  | 19,920 |  |  | - |  |  | 111,163
Currency forward contracts |  |  | - |  |  | 8,595 |  |  | - |  |  | 8,595
Total financial instruments owned |  |  | 2,365,984 |  |  | 32,381 |  |  | 260 |  |  | 2,398,625
Financial instruments owned and pledged as collateral: |  |  |  |  |  |  |  |  |  |  |  |
Stocks |  |  | 759,705 |  |  | - |  |  | - |  |  | 759,705
Warrants |  |  | 273 |  |  | - |  |  | - |  |  | 273
U.S. and foreign government securities |  |  | 78,012 |  |  | - |  |  | - |  |  | 78,012
Corporate and municipal bonds |  |  | 1,477 |  |  | - |  |  | - |  |  | 1,477
Total financial instruments owned and pledged as collateral |  |  | 839,467 |  |  | - |  |  | - |  |  | 839,467
Total financial insturments owned |  |  | 3,205,451 |  |  | 32,381 |  |  | 260 |  |  | 3,238,092
Other fair value investments, included in other assets: |  |  |  |  |  |  |  |  |  |  |  |
Stocks and options |  |  | 33,159 |  |  | - |  |  | 106 |  |  | 33,265
Corporate and municipal bonds |  |  | - |  |  | 1,696 |  |  | - |  |  | 1,696
Total other fair value investments, included in other assets |  |  | 33,159 |  |  | 1,696 |  |  | 106 |  |  | 34,961
Total Financial Assets at Fair Value |  | $ | 6,666,490 |  | $ | 34,077 |  | $ | 366 |  | $ | 6,700,933
|  | Financial Liabilities At Fair Value as of June 30, 2014
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial instruments sold, not yet purchased: |  |  |  |  |  |  |  |  |  |  |  |
Stocks |  | $ | 1,370,830 |  | $ | - |  | $ | 77 |  | $ | 1,370,907
Options |  |  | 1,168,783 |  |  | - |  |  | - |  |  | 1,168,783
Warrants and discount certificates |  |  | 603 |  |  | - |  |  | - |  |  | 603
U.S. and foreign government securities |  |  | 1,840 |  |  | 1,049 |  |  | - |  |  | 2,889
Corporate bonds |  |  | 77,047 |  |  | 10,556 |  |  | - |  |  | 87,603
Currency forward contracts |  |  | - |  |  | - |  |  | - |  |  | -
Total financial instruments sold, not yet purchased |  |  | 2,619,103 |  |  | 11,605 |  |  | 77 |  |  | 2,630,785
Other fair value liabilities, included in accounts payable, accrued expenses and other liabilities |  |  |  |  |  |  |  |  |  |  |  |
Stocks and options |  |  | 132,036 |  |  | - |  |  | - |  |  | 132,036
Total other fair value liabilities, included in accounts payable, accrued expenses and other liabilities |  |  | 132,036 |  |  | - |  |  | - |  |  | 132,036
Total Financial Liabilities at Fair Value |  | $ | 2,751,139 |  | $ | 11,605 |  | $ | 77 |  | $ | 2,762,821
|  | Financial Assets At Fair Value as of December 31, 2013
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Securities segregated for regulatory purposes |  | $ | 1,300,016 |  | $ | - |  | $ | - |  | $ | 1,300,016
Financial instruments owned: |  |  |  |  |  |  |  |  |  |  |  |
Stocks |  |  | 1,243,914 |  |  | - |  |  | 57 |  |  | 1,243,971
Options |  |  | 1,880,481 |  |  | - |  |  | - |  |  | 1,880,481
Warrants and discount certificates |  |  | 57,144 |  |  | - |  |  | - |  |  | 57,144
U.S. and foreign government securities |  |  | 4,641 |  |  | 2,102 |  |  | - |  |  | 6,743
Corporate and municipal bonds |  |  | 72,750 |  |  | 18,476 |  |  | - |  |  | 91,226
Currency forward contracts |  |  | - |  |  | 5,748 |  |  | - |  |  | 5,748
Total financial instruments owned |  |  | 3,258,930 |  |  | 26,326 |  |  | 57 |  |  | 3,285,313
Financial instruments owned and pledged as collateral: |  |  |  |  |  |  |  |  |  |  |  |
Stocks |  |  | 1,097,734 |  |  | - |  |  | - |  |  | 1,097,734
Warrants |  |  | 233 |  |  | - |  |  | - |  |  | 233
U.S. and foreign government securities |  |  | 64,439 |  |  | - |  |  | - |  |  | 64,439
Corporate and municipal bonds |  |  | 1,125 |  |  | - |  |  | - |  |  | 1,125
Total financial instruments owned and pledged as collateral |  |  | 1,163,531 |  |  | - |  |  | - |  |  | 1,163,531
Total financial instruments owned |  |  | 4,422,461 |  |  | 26,326 |  |  | 57 |  |  | 4,448,844
Other fair value investments, included in other assets: |  |  |  |  |  |  |  |  |  |  |  |
Stocks |  |  | 25,604 |  |  | 419 |  |  | 101 |  |  | 26,124
Corporate and municipal bonds |  |  | 1,776 |  |  | 47,896 |  |  | - |  |  | 49,672
Mortgage backed securities |  |  | - |  |  | 26,892 |  |  | - |  |  | 26,892
Other asset backed securities |  |  | - |  |  | 22,734 |  |  | - |  |  | 22,734
Other |  |  | - |  |  | 5,328 |  |  | - |  |  | 5,328
Total other fair value assets |  |  | 27,380 |  |  | 103,269 |  |  | 101 |  |  | 130,750
Total Financial Assets at Fair Value |  | $ | 5,749,857 |  | $ | 129,595 |  | $ | 158 |  | $ | 5,879,610
|  | Financial Liabilities At Fair Value as of December 31, 2013
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial instruments sold, not yet purchased: |  |  |  |  |  |  |  |  |  |  |  |
Stocks |  | $ | 1,266,429 |  | $ | - |  | $ | 3 |  | $ | 1,266,432
Options |  |  | 1,793,248 |  |  | - |  |  | - |  |  | 1,793,248
Warrants and discount certificates |  |  | 1,215 |  |  | - |  |  | - |  |  | 1,215
U.S. and foreign government securities |  |  | - |  |  | 4,412 |  |  | - |  |  | 4,412
Corporate bonds |  |  | 77,936 |  |  | 9,628 |  |  | - |  |  | 87,564
Currency forward contracts |  |  | - |  |  | 802 |  |  | - |  |  | 802
Total financial instruments sold, not yet purchased |  | $ | 3,138,828 |  | $ | 14,842 |  | $ | 3 |  | $ | 3,153,673
Transfers between Level 1 and Level 2 Transfers of financial instruments owned and sold, not yet purchased to or from Levels 1 and 2 arise where the market for a specific security has become active or inactive during the period. The fair values transferred are ascribed as if the financial assets or financial liabilities had been transferred as of the end of the period. During the six months ended June 30, 2014, the Company reclassified approximately $0.7 million of financial instruments owned from Level 1 to Level 2 and reclassified approximately $1.5 million from Level 2 to Level 1. Financial instruments sold, but not yet purchased of approximately $1.4 million were reclassified from Level 1 to Level 2 and approximately $4.5 million were reclassified from Level 2 to Level 1. The Company reclassified approximately $1.7 million of other fair value investments, recorded in other assets, from Level 1 to Level 2. During the six months ended June 30, 2013, the Company reclassified approximately $1.9 million of financial instruments owned from Level 1 to Level 2 and reclassified approximately $1.6 million from Level 2 to Level 1. Financial instruments sold, but not yet purchased of approximately $0.8 million were reclassified from Level 1 to Level 2 and approximately $0.9 million were reclassified from Level 2 to Level 1. Level 3 Financial Assets and Financial Liabilities The Company’s Level 3 financial assets and financial liabilities are comprised of delisted securities reported within financial instruments owned and financial instruments sold, not yet purchased. The following tables report Level 3 activities for the three months ended June 30, 2014: Financial assets—Level 3 activities:
Balance, January 1, 2014 |  | $ | 158
Total gains or losses (realized/unrealized) - Included in earnings |  |  | 43
Purchases, issuances and settlements |  |  | (38)
Transfers in and/or out of Level 3 |  |  | 203
Balance, June 30, 2014 |  | $ | 366
Financial liabilities—Level 3 activities:
Balance, January 1, 2014 |  | $ | 3
Total gains or losses (realized/unrealized) - Included in earnings |  |  | -
Purchases, issuances and settlements |  |  | -
Transfers in and/or out of Level 3 |  |  | 74
Balance, June 30, 2014 |  | $ | 77
There were no Level 3 activities, including transfers, for the six months ended June 30, 2013. Trading Gains from Market Making Transactions Trading gains, net from market making transactions reported in the statements of comprehensive income, by major product type, are comprised of:
|  | Three Months Ended |  | Six Months Ended
|  | June 30, |  | June 30,
|  | 2014 |  | 2013 |  | 2014 |  | 2013
Equities |  | $ | 56,564 |  | $ | 92,992 |  | $ | 151,709 |  | $ | 161,516
Fixed Income |  |  | 6,361 |  |  | 6,703 |  |  | 12,091 |  |  | 14,471
Foreign Exchange |  |  | 21,095 |  |  | (40,677) |  |  | 47,732 |  |  | (98,002)
Commodities |  |  | - |  |  | 88 |  |  | - |  |  | 115
Total Trading Gains |  | $ | 84,020 |  | $ | 59,106 |  | $ | 211,532 |  | $ | 78,100
These transactions are related to the Company’s financial instruments owned and financial instruments sold, not yet purchased (all at fair value) and include both derivative and non‑derivative financial instruments, including exchange traded options and futures. These gains and losses also include market making related dividend and fixed income trading interest income and expense. The gains (losses) in the above table are not representative of the integrated trading strategies applied by the Company, which utilize financial instruments across various product types. Gains and losses in one product type frequently offset gains and losses in other product types. Netting of Financial Assets and Financial Liabilities The Company adopted the guidance in ASU 2011‑11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities and ASU 2013‑ 01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities for periods beginning after January 1, 2013. This authoritative guidance requires companies to report disclosures of offsetting assets and liabilities. The Company does not net securities segregated for regulatory purposes, and securities borrowed and securities loaned are presented on a gross basis in the condensed consolidated statements of financial condition. In the tables below, the amounts of derivative financial instruments owned that are not offset in the condensed consolidated statements of financial condition, but could be netted against financial liabilities with specific counterparties under master netting agreements, including clearing houses (exchange traded options, warrants and discount certificates) or over the counter currency forward contract counterparties, are presented to provide financial statement readers with the Company’s estimate of its net exposure to counterparties for these derivative financial instruments. The following table sets forth the netting of financial assets and of financial liabilities as of June 30, 2014 and December 31, 2013, pursuant to the requirements of ASU 2011‑11 and ASU 2013‑01 (millions).
|  | June 30, 2014 |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Gross Amounts |  | Net Amounts of |  | Gross Amounts Not Offset in the |  |  |
|  |  |  |  |  | Offset in the |  | Assets Presented |  | Condensed Consolidated |  |  |
|  |  |  |  |  | Condensed |  | in the Condensed |  | Statement |  |  |
|  |  |  | Consolidated |  | Consolidated |  | of Financial Condition |  |  |
|  | Gross Amounts of |  | Statement of |  | Statement of |  |  |  |  |  |  |
|  | Recognized |  | Financial |  | Financial |  | Financial |  | Cash Collateral |  |  |
|  | Assets |  | Condition |  | Condition |  | Instruments |  | Pledged |  | Net Amount
Offsetting of Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities segregated for regulatory purposes -purchased under agreements to resell |  | $ | 5,913.9 | 1 |  | $ | - |  | $ | 5,913.9 |  | $ | (5,913.9) |  | $ | - |  | $ | -
Securities borrowed |  |  | 3,499.2 |  |  |  | - |  |  | 3,499.2 |  |  | (3,419.0) |  |  | - |  |  | 80.2
Securities purchased under agreements to resell |  |  | 274.3 |  |  |  | - |  |  | 274.3 |  |  | (274.3) |  |  | - |  |  | -
Financial Instruments owned: |  |  | - |  |  |  |  |  |  |  |  |  | - |  |  |  |  |  |
Options |  |  | 1,073.0 |  |  |  | - |  |  | 1,073.0 |  |  | (1,032.5) |  |  | - |  |  | 40.5
Warrants and discount certificates |  |  | 34.6 |  |  |  | - |  |  | 34.6 |  |  | (0.6) |  |  | - |  |  | 34.0
Currency forward contracts |  |  | 8.6 |  |  |  | - |  |  | 8.6 |  |  | - |  |  | - |  |  | 8.6
Total |  | $ | 10,803.6 |  |  | $ | - |  | $ | 10,803.6 |  | $ | (10,640.3) |  | $ | - |  | $ | 163.3
|  |  |  |  |  |  |  | Net Amounts of |  | Gross Amounts Not Offset in the |  |  |
|  |  |  |  |  | Gross Amounts |  | Liabilities |  | Condensed Consolidated |  |  |
|  |  |  |  |  | Offset in the |  | Presented in the |  | Statement |  |  |
|  |  |  | Condensed |  | Condensed |  | of Financial Condition |  |  |
|  |  |  |  |  | Consolidated |  | Consolidated |  |  |  |  |  |  |  |  |
|  | Gross Amounts of |  | Statement of |  | Statement of |  |  |  |  |  |  |  |  |
|  | Recognized |  |  | Financial |  | Financial |  | Financial |  | Cash Collateral |  |  |
|  | Liabilities |  | Condition |  | Condition |  | Instruments |  | Received |  | Net Amount
Offsetting of Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities loaned |  | $ | 2,932.4 |  |  | $ | - |  | $ | 2,932.4 |  | $ | (2,932.0) |  | $ | - |  | $ | 0.4
Financial instruments sold, not yet purchased: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options |  |  | 1,168.8 |  |  |  | - |  |  | 1,168.8 |  |  | (1,032.5) |  |  | - |  |  | 136.3
Warrants and discount certificates |  |  | 0.6 |  |  |  | - |  |  | 0.6 |  |  | (0.6) |  |  | - |  |  | -
Currency forward contracts |  |  | - |  |  |  | - |  |  | - |  |  | - |  |  | - |  |  | -
Total |  | $ | 4,101.8 |  |  | $ | - |  | $ | 4,101.8 |  | $ | (3,965.1) |  | $ | - |  | $ | 136.7
|  | December 31, 2013 |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Gross Amounts |  | Net Amounts of |  | Gross Amounts Not Offset in the |  |  |
|  |  |  |  |  | Offset in the |  | Assets Presented |  | Condensed Consolidated |  |  |
|  |  |  |  |  | Condensed |  | in the Condensed |  | Statement |  |  |
|  |  |  | Consolidated |  | Consolidated |  | of Financial Condition |  |  |
|  | Gross Amounts of |  | Statement of |  | Statement of |  |  |  |  |  |  |
|  | Recognized |  | Financial |  | Financial |  | Financial |  | Cash Collateral |  |  |
|  | Assets |  | Condition |  | Condition |  | Instruments |  | Pledged |  | Net Amount
Offsetting of Financial Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities segregated for regulatory purposes - purchased under agreements to resell |  | $ | 6,734.2 | 1 |  | $ | - |  | $ | 6,734.2 |  | $ | (6,734.2) |  | $ | - |  | $ | -
Securities borrowed |  |  | 2,751.5 |  |  |  | - |  |  | 2,751.5 |  |  | (2,694.6) |  |  | - |  |  | 56.9
Securities purchased under agreements to resell |  |  | 386.3 |  |  |  | - |  |  | 386.3 |  |  | (386.3) |  |  | - |  |  | -
Financial Instruments owned: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options |  |  | 1,880.5 |  |  |  | - |  |  | 1,880.5 |  |  | (1,652.8) |  |  | - |  |  | 227.7
Warrants and discount certificates |  |  | 57.4 |  |  |  | - |  |  | 57.4 |  |  | (1.2) |  |  | - |  |  | 56.2
Currency forward contracts |  |  | 5.7 |  |  |  | - |  |  | 5.7 |  |  | - |  |  | - |  |  | 5.7
Total |  | $ | 11,815.6 |  |  | $ | - |  | $ | 11,815.6 |  | $ | (11,469.1) |  | $ | - |  | $ | 346.5
|  |  |  |  |  |  |  | Net Amounts of |  |  | Gross Amounts Not Offset in the |  |  |
|  |  |  |  |  | Gross Amounts |  | Liabilities |  | Condensed Consolidated |  |  |
|  |  |  |  |  | Offset in the |  | Presented in the |  | Statement |  |  |
|  |  |  | Condensed |  | Condensed |  | of Financial Condition |  |  |
|  |  |  |  |  | Consolidated |  | Consolidated |  |  |  |  |  |  |  |  |
|  | Gross Amounts of |  | Statement of |  | Statement of |  |  |  |  |  |  |  |  |
|  | Recognized |  |  | Financial |  | Financial |  | Financial |  | Cash Collateral |  |  |
|  | Liabilities |  | Condition |  | Condition |  | Instruments |  | Received |  | Net Amount
Offsetting of Financial Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities loaned |  | $ | 2,563.7 |  |  | $ | - |  | $ | 2,563.7 |  | $ | (2,544.6) |  | $ | - |  | $ | 19.1
Financial instruments sold, not yet purchased: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Options |  |  | 1,793.2 |  |  |  | - |  |  | 1,793.2 |  |  | (1,652.8) |  |  | - |  |  | 140.4
Warrants and discount certificates |  |  | 1.2 |  |  |  | - |  |  | 1.2 |  |  | (1.2) |  |  | - |  |  | -
Currency forward contracts |  |  | 0.8 |  |  |  | - |  |  | 0.8 |  |  | - |  |  | - |  |  | 0.8
Total |  | $ | 4,358.9 |  |  | $ | - |  | $ | 4,358.9 |  | $ | (4,198.6) |  | $ | - |  | $ | 160.3
| (1) |  | As of June 30, 2014 and December 31, 2013, the Company had $5.91 billion and $6.73 billion, respectively, of securities purchased under agreements to resell that were segregated to satisfy regulatory requirements. These securities are included in “Cash and securities—segregated for regulatory purposes” in the condensed consolidated statements of financial condition.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13504-108611 + Details
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