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Revenue From Contracts With Customers | 9 Months Ended
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Sep. 30, 2019
Revenue from Contract with Customer [Abstract] |
Revenues From Contracts With Customers | 8. Revenues from Contracts with Customers Revenue from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring the promised services to the customers. A service is transferred to a customer when, or as, the customer obtains control of that service. A performance obligation may be satisfied at a point in time or over time. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised service. Revenue from a performance obligation satisfied over time is recognized by measuring the Company’s progress in satisfying the performance obligation in a manner that depicts the transfer of the services to the customer. The amount of revenue recognized reflects the consideration the Company expects to receive in exchange for those promised services (i.e., the “transaction price”). In determining the transaction price, the Company considers multiple factors, including the effects of variable consideration, if any. The Company’s revenues from contracts with customers are recognized when the performance obligations are satisfied at an amount that reflects the consideration expected to be received in exchange for such services. The majority of the Company’s performance obligations are satisfied at a point in time and are typically collected from customers by debiting their brokerage account with the Company. ‎ Nature of Services The Company’s services under contracts with customers are mainly related to its electronic brokerage business. The Company’s main sources of revenues from contracts with customers are as follows: -Commissions are charged to customers for order execution services and trade clearing and settlement services. These services represent a single performance obligation as the services are not separately identifiable in the context of the contract. The Company recognizes revenue at a point in time at the execution of the order (i.e., trade date). Commissions are generally collected from cleared customers on trade date and from non-cleared customers monthly. -Market data fees are charged to customers for market data services to which they subscribe, that are delivered by the Company. The Company recognizes revenue monthly as the performance obligation is satisfied over time by continually providing market data for the period. Market data fees are collected monthly, generally in advance. -Risk exposure fees are charged to customers who carry positions with market risk that exceeds defined thresholds. The Company recognizes revenue daily as the performance obligation is satisfied at a point in time by the Company taking on additional risk of account liquidation and potential losses due to insufficient margin. Risk exposure fees are collected daily. -Payments for order flow are earned from various options exchanges based upon options trading volume originated by the Company that meets certain criteria. The Company recognizes revenue daily as the performance obligation is satisfied at a point in time on customer orders that qualify for payments subject to exchange-mandated programs. Payments for order flow are collected monthly, in arrears. -Minimum activity fees are charged to customers that do not generate the required minimum monthly commission. The Company recognizes revenue monthly as the performance obligation is satisfied at a point in time by servicing customer accounts that do not generate the required minimum monthly commissions. Minimum activity fees are collected monthly, in arrears. The Company’s electronic brokerage business also earns revenues from other services, including order cancelation or modification fees, position transfer fees, telecommunications fees, withdrawal fees, and bank sweep program fees, among others. Disaggregation of Revenue The following table sets forth revenue from contracts with customers by business segment, geographic location, and major types of services for the three months and nine months ended September 30, 2019 and 2018, as follows:
|  | Three Months Ended September 30, 2019
|  | Electronic Brokerage |  | Market Making |  | Corporate |  | Total
|  | (in millions)
Geographic location 1 |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 157 |  | $ | — |  | $ | 1 |  | $ | 158
International |  |  | 64 |  |  | — |  |  | — |  |  | 64
|  | $ | 221 |  | $ | — |  | $ | 1 |  | $ | 222
Major types of services |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 187 |  | $ | — |  | $ | — |  | $ | 187
Market data fees 2 |  |  | 11 |  |  | — |  |  | — |  |  | 11
Risk exposure fees 2 |  |  | 4 |  |  | — |  |  | — |  |  | 4
Payments for order flow 2 |  |  | 5 |  |  | — |  |  | — |  |  | 5
Minimum activity fees 2 |  |  | 7 |  |  | — |  |  | — |  |  | 7
Other 2 |  |  | 7 |  |  | — |  |  | 1 |  |  | 8
|  | $ | 221 |  | $ | — |  | $ | 1 |  | $ | 222
‎
|  | Nine Months Ended September 30, 2019
|  | Electronic Brokerage |  | Market Making |  | Corporate |  | Total
|  | (in millions)
Geographic location 1 |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 457 |  | $ | 1 |  | $ | 2 |  | $ | 460
International |  |  | 183 |  |  | — |  |  | — |  |  | 183
|  | $ | 640 |  | $ | 1 |  | $ | 2 |  | $ | 643
Major types of services |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 538 |  | $ | — |  | $ | — |  | $ | 538
Market data fees 2 |  |  | 34 |  |  | — |  |  | — |  |  | 34
Risk exposure fees 2 |  |  | 13 |  |  | — |  |  | — |  |  | 13
Payments for order flow 2 |  |  | 16 |  |  | — |  |  | — |  |  | 16
Minimum activity fees 2 |  |  | 20 |  |  | — |  |  | — |  |  | 20
Other 2 |  |  | 19 |  |  | 1 |  |  | 2 |  |  | 22
|  | $ | 640 |  | $ | 1 |  | $ | 2 |  | $ | 643
|  | Three Months Ended September 30, 2018
|  | Electronic Brokerage |  | Market Making |  | Corporate |  | Total
|  | (in millions)
Geographic location 1 |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 144 |  | $ | 1 |  | $ | — |  | $ | 145
International |  |  | 59 |  |  | — |  |  | — |  |  | 59
|  | $ | 203 |  | $ | 1 |  | $ | — |  | $ | 204
Major types of services |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 167 |  | $ | — |  | $ | — |  | $ | 167
Market data fees 2 |  |  | 12 |  |  | — |  |  | — |  |  | 12
Risk exposure fees 2 |  |  | 5 |  |  | — |  |  | — |  |  | 5
Payments for order flow 2 |  |  | 6 |  |  | — |  |  | — |  |  | 6
Minimum activity fees 2 |  |  | 6 |  |  | — |  |  | — |  |  | 6
Other 2 |  |  | 7 |  |  | 1 |  |  | — |  |  | 8
|  | $ | 203 |  | $ | 1 |  | $ | — |  | $ | 204
‎
|  | Nine Months Ended September 30, 2018
|  | Electronic Brokerage |  | Market Making |  | Corporate |  | Total
|  | (in millions)
Geographic location 1 |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 483 |  | $ | 4 |  | $ | 1 |  | $ | 488
International |  |  | 193 |  |  | — |  |  | — |  |  | 193
|  | $ | 676 |  | $ | 4 |  | $ | 1 |  | $ | 681
Major types of services |  |  |  |  |  |  |  |  |  |  |  |
Commissions |  | $ | 572 |  | $ | — |  | $ | — |  | $ | 572
Market data fees 2 |  |  | 34 |  |  | — |  |  | — |  |  | 34
Risk exposure fees 2 |  |  | 20 |  |  | — |  |  | — |  |  | 20
Payments for order flow 2 |  |  | 16 |  |  | — |  |  | — |  |  | 16
Minimum activity fees 2 |  |  | 16 |  |  | — |  |  | — |  |  | 16
Other 2 |  |  | 18 |  |  | 4 |  |  | 1 |  |  | 23
|  | $ | 676 |  | $ | 4 |  | $ | 1 |  | $ | 681
(1)Based on the location of the subsidiaries in which the revenues are recorded. ‎ (2)Included in other income on the condensed consolidated statements of comprehensive income. Receivables and Contract Balances Receivables arise when the Company has an unconditional right to receive payment under a contract with a customer and are derecognized when the cash is received. Receivables of $9 million, as of September 30, 2019 and December 31, 2018, respectively, are reported in other assets in the condensed consolidated statements of financial condition. Contract assets arise when the revenue associated with the contract is recognized prior to the Company’s unconditional right to receive payment under a contract with a customer (i.e., unbilled receivable) and are derecognized when either it becomes a receivable or the cash is received. Contract assets are reported in other assets in the condensed consolidated statements of financial condition. As of September 30, 2019 and December 31, 2018, contract asset balances were not material. Contract liabilities arise when customers remit contractual cash payments in advance of the Company satisfying its performance obligations under the contract and are derecognized when the revenue associated with the contract is recognized either when a milestone is met triggering the contractual right to bill the customer or when the performance obligation is satisfied. Contract liabilities are reported in accounts payable, accrued expenses and other liabilities in the condensed consolidated statements of financial condition. As of September 30, 2019 and December 31, 2018, contract liability balances were not material. ‎

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
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