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Derivative Financial Instruments | 9 Months Ended
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Aug. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Note 7. Derivative Financial Instruments Our derivative activities are recorded at fair value in Financial instruments owned and Financial instruments sold, not yet purchased, net of cash paid or received under credit support agreements and on a net counterparty basis when a legally enforceable right to offset exists under a master netting agreement. We enter into derivative transactions to satisfy the needs of our clients and to manage our own exposure to market and credit risks. In addition, we apply hedge accounting to: (1) interest rate swaps that have been designated as fair value hedges of the changes in fair value due to the benchmark interest rate for certain fixed rate senior long-term debt, and (2) forward foreign exchange contracts designated as hedges to offset the change in the value of certain net investments in foreign operations. Derivatives are subject to various risks similar to other financial instruments, including market, credit and operational risk. The risks of derivatives should not be viewed in isolation, but rather should be considered on an aggregate basis along with our other trading-related activities. We manage the risks associated with derivatives on an aggregate basis along with the risks associated with proprietary trading as part of our firm wide risk management policies. In connection with our derivative activities, we may enter into International Swaps and Derivatives Association, Inc. master netting agreements or similar agreements with counterparties.
| August 31, 2025 (1)
| Assets | Liabilities
$ in thousands | Fair Value | Number of Contracts (2) | Fair Value | Number of Contracts (2)
Derivatives designated as accounting hedges: |  |  |  |
Interest rate contracts: |  |  |  |
Cleared OTC ........................................ | $57 | 1 | $1,131 | 3
Foreign exchange contracts: |  |  |  |
Bilateral OTC ....................................... | 1,846 | 8 | 61,729 | 4
Total derivatives designated as accounting hedges ............................ | 1,903 |  | 62,860 |
Derivatives not designated as accounting hedges: |  |  |  |
Interest rate contracts: |  |  |  |
Exchange-traded ................................ | 562 | 16,529 | 113 | 17,235
Cleared OTC ........................................ | 508,861 | 7,592 | 523,997 | 8,060
Bilateral OTC ....................................... | 316,345 | 1,850 | 630,797 | 744
Foreign exchange contracts: |  |  |  |
Exchange-traded ................................ | 215 | 80 | 76 | 120
Bilateral OTC ....................................... | 106,449 | 42,732 | 84,671 | 13,109
Equity contracts: |  |  |  |
Exchange-traded ................................ | 2,602,854 | 3,463,187 | 2,037,083 | 2,161,112
Bilateral OTC ....................................... | 918,891 | 44,140 | 1,008,462 | 34,433
Commodity contracts: |  |  |  |
Exchange-traded ................................ | 273 | 622 | 50 | 530
Bilateral OTC ....................................... | 4,606 | 11,850 | 3,127 | 5,642
Credit contracts: |  |  |  |
Cleared OTC ........................................ | 1,721 | 51 | 10,212 | 6
Bilateral OTC ....................................... | 62,545 | 14 | 43,037 | 19
Total derivatives not designated as accounting hedges ....................... | 4,523,322 |  | 4,341,625 |
Total gross derivative assets/ liabilities: |  |  |  |
Exchange-traded ................................ | 2,603,904 |  | 2,037,322 |
Cleared OTC ........................................ | 510,639 |  | 535,340 |
Bilateral OTC ....................................... | 1,410,682 |  | 1,831,823 |
Amounts offset in our Consolidated Statements of Financial Condition (3): |  |  |  |
Exchange-traded ................................ | (1,445,932) |  | (1,445,932) |
Cleared OTC ........................................ | (509,365) |  | (517,824) |
Bilateral OTC ....................................... | (837,443) |  | (1,187,453) |
Net amounts per Consolidated Statements of Financial Condition (4) ................................. | $1,732,485 |  | $1,253,276 |
(1)Exchange-traded derivatives include derivatives executed on an organized exchange. Cleared OTC derivatives include derivatives executed bilaterally and subsequently novated to and cleared through central clearing counterparties. Bilateral OTC derivatives include derivatives executed and settled bilaterally without the use of an organized exchange or central clearing counterparty. (2)The number of exchange-traded contracts may include open futures contracts. The unsettled fair value of these futures contracts is included in Receivables from/Payables to brokers, dealers and clearing organizations. (3)Amounts netted include both netting by counterparty and for cash collateral paid or received. (4)We have not received or pledged additional collateral under master netting agreements and/or other credit support agreements that is eligible to be offset beyond what has been offset in our Consolidated Statements of Financial Condition.
| November 30, 2024 (1)
| Assets | Liabilities
$ in thousands | Fair Value | Number of Contracts (2) | Fair Value | Number of Contracts (2)
Derivatives designated as accounting hedges: |  |  |  |
Interest rate contracts: |  |  |  |
Cleared OTC ......................................... | $3,396 | 3 | $— | —
Foreign exchange contracts: |  |  |  |
Bilateral OTC ........................................ | 41,903 | 3 | — | —
Total derivatives designated as accounting hedges ............................. | 45,299 |  | — |
Derivatives not designated as accounting hedges: |  |  |  |
Interest rate contracts: |  |  |  |
Exchange-traded ................................. | 273 | 16,548 | 13 | 32,984
Cleared OTC ......................................... | 1,030,842 | 6,663 | 1,030,671 | 6,891
Bilateral OTC ........................................ | 365,678 | 1,096 | 717,255 | 1,256
Foreign exchange contracts: |  |  |  |
Bilateral OTC ........................................ | 132,240 | 57,786 | 138,608 | 35,545
Equity contracts: |  |  |  |
Exchange-traded ................................. | 682,327 | 1,777,822 | 521,889 | 1,574,498
Bilateral OTC ........................................ | 855,169 | 33,516 | 1,024,129 | 20,587
Commodity contracts: |  |  |  |
Exchange-traded ................................. | 22 | 806 | 17 | 697
Bilateral OTC ....................................... | 4,570 | 11,691 | 1,381 | 5,180
Credit contracts: |  |  |  |
Cleared OTC ......................................... | 31,488 | 66 | 38,711 | 32
Bilateral OTC ........................................ | 37,618 | 16 | 31,353 | 32
Total derivatives not designated as accounting hedges ............................. | 3,140,227 |  | 3,504,027 |
Total gross derivative assets/ liabilities: |  |  |  |
Exchange-traded ................................. | 682,622 |  | 521,919 |
Cleared OTC ......................................... | 1,065,726 |  | 1,069,382 |
Bilateral OTC ........................................ | 1,437,178 |  | 1,912,726 |
Amounts offset in our Consolidated Statements of Financial Condition (3): |  |  |  |
Exchange-traded ................................. | (476,364) |  | (476,364) |
Cleared OTC ......................................... | (1,058,995) |  | (1,066,232) |
Bilateral OTC ........................................ | (1,132,392) |  | (1,251,117) |
Net amounts per Consolidated Statements of Financial Condition (4) .................................. | $517,775 |  | $710,314 |
(1)Exchange-traded derivatives include derivatives executed on an organized exchange. Cleared OTC derivatives include derivatives executed bilaterally and subsequently novated to and cleared through central clearing counterparties. Bilateral OTC derivatives include derivatives executed and settled bilaterally without the use of an organized exchange or central clearing counterparty. (2)The number of exchange-traded contracts may include open futures contracts. The unsettled fair value of these futures contracts is included in Receivables from/Payables to brokers, dealers and clearing organizations. (3)Amounts netted include both netting by counterparty and for cash collateral paid or received. (4)We have not received or pledged additional collateral under master netting agreements and/or other credit support agreements that is eligible to be offset beyond what has been offset in our Consolidated Statements of Financial Condition. Gains (losses) recognized in Interest expense related to fair value hedges:
$ in thousands | Three Months Ended August 31, | Nine Months Ended August 31,
Gains (Losses) | 2025 | 2024 | 2025 | 2024
Interest rate swaps (1) .................. | $8,902 | $43,765 | $2,859 | $12,954
Long-term debt ............................... | (21,388) | (61,068) | (40,047) | (62,053)
Total ................................................. | $(12,486) | $(17,303) | $(37,188) | $(49,099)
(1)Includes net settlements of $12.3 million and $36.4 million for the three and nine months ended August 31, 2025, respectively, and $16.2 million and $48.2 million for the three and nine months ended August 31, 2024, respectively. Gains (losses) on our net investment hedges recognized in Currency translation and other adjustments, a component of Other comprehensive income (loss):
$ in thousands | Three Months Ended August 31, | Nine Months Ended August 31,
Gains (Losses) | 2025 | 2024 | 2025 | 2024
Foreign exchange contracts ......... | $(3,238) | $(38,878) | $(77,370) | $(47,686)
Total ................................................. | $(3,238) | $(38,878) | $(77,370) | $(47,686)
Unrealized and realized gains (losses) on derivative contracts recognized primarily in Principal transactions revenues, which are utilized in connection with our client activities and our economic risk management activities:
$ in thousands | Three Months Ended August 31, | Nine Months Ended August 31,
Gains (Losses) | 2025 | 2024 | 2025 | 2024
Interest rate contracts ................... | $242 | $72,271 | $(30,970) | $107,103
Foreign exchange contracts ......... | (15,402) | 15,760 | 1,309 | 48,289
Equity contracts .............................. | 444,317 | 72,741 | 1,762,483 | (186,617)
Commodity contracts .................... | 3,476 | 6,270 | 16,932 | 24,702
Credit contracts .............................. | (9,105) | (222) | (7,401) | (13,592)
Total ................................................. | $423,528 | $166,820 | $1,742,353 | $(20,115)
The net gains (losses) on derivative contracts in the table above are one of a number of activities comprising our business activities and are before consideration of economic hedging transactions, which generally offset the net gains (losses) included above. We substantially mitigate our exposure to market risk on our cash instruments through derivative contracts, which generally provide offsetting revenues, and we manage the risk associated with these contracts in the context of our overall risk management framework. OTC Derivatives Remaining contract maturities at August 31, 2025:
| OTC Derivative Assets (1) (2) (3)
$ in thousands | 0 – 12 Months | 1 – 5 Years | Greater Than 5 Years | Cross- Maturity Netting (4) | Total
Commodity swaps, options and forwards ...................................... | $4,308 | $— | $— | $— | $4,308
Equity options and forwards .......... | 297,427 | 7,350 | — | (220) | 304,557
Credit default swaps ....................... | — | 24,840 | — | — | 24,840
Total return swaps ........................... | 137,965 | 113,782 | — | (15,878) | 235,869
Foreign currency forwards, swaps and options ................................. | 51,979 | 863 | — | (555) | 52,287
Fixed income forwards ................... | 39,641 | — | — | — | 39,641
Interest rate swaps, options and forwards ...................................... | 53,565 | 157,406 | 28,366 | (16,967) | 222,370
Total ................................................... | $584,885 | $304,241 | $28,366 | $(33,620) | 883,872
Cross-product counterparty netting .......................................... |  |  |  |  | (35,717)
Total OTC derivative assets included in Financial instruments owned .................... |  |  |  |  | $848,155
| OTC Derivative Liabilities (1) (2) (3)
$ in thousands | 0 – 12 Months | 1 – 5 Years | Greater Than 5 Years | Cross- Maturity Netting (4) | Total
Commodity swaps, options and forwards ...................................... | $2,829 | $— | $— | $— | $2,829
Equity options and forwards .......... | 104,168 | 323,381 | — | (220) | 427,329
Credit default swaps ........................ | 251 | 9,583 | — | — | 9,834
Total return swaps ........................... | 161,468 | 90,507 | 37 | (15,878) | 236,134
Foreign currency forwards, swaps and options ................................. | 90,526 | 420 | — | (555) | 90,391
Fixed income forwards ................... | 5,839 | — | — | — | 5,839
Interest rate swaps, options and forwards ...................................... | 33,944 | 86,299 | 454,080 | (16,967) | 557,356
Total ................................................... | $399,025 | $510,190 | $454,117 | $(33,620) | 1,329,712
Cross-product counterparty netting .......................................... |  |  |  |  | (35,717)
Total OTC derivative liabilities included in Financial instruments sold, not yet purchased ................................... |  |  |  |  | $1,293,995
(1)At August 31, 2025, we held net exchange-traded derivative assets and liabilities with a fair value of $1.16 billion and $591.4 million, respectively, which are not included in these tables. (2)OTC derivative assets and liabilities in the tables above are gross of collateral pledged. OTC derivative assets and liabilities are recorded net of collateral pledged in our Consolidated Statements of Financial Condition. At August 31, 2025, cash collateral received and pledged was $273.6 million and $632.1 million, respectively. (3)Derivative fair values include counterparty netting within product category. (4)Amounts represent the netting of receivable balances with payable balances for the same counterparty within product category across maturity categories. OTC derivative assets at August 31, 2025:
Counterparty credit quality (1): | $ in thousands
A- or higher ............................................................................................... | $156,293
BBB- to BBB+ ........................................................................................... | 44,065
BB+ or lower ............................................................................................. | 305,776
Unrated ..................................................................................................... | 342,021
Total .......................................................................................................... | $848,155
(1)We utilize internal credit ratings determined by our Risk Management department. Credit ratings determined by Risk Management use methodologies that produce ratings generally consistent with those produced by external rating agencies. Credit Related Derivative Contracts External credit ratings of the underlyings or referenced assets for our written credit related derivative contracts:
| August 31, 2025
| External Credit Rating |
$ in millions | Investment Grade | Non- investment Grade | Total Notional
Credit protection sold: |  |  |
Index credit default swaps ..................... | $31.1 | $364.1 | $395.2
| November 30, 2024
| External Credit Rating |
$ in millions | Investment Grade | Non- investment Grade | Total Notional
Credit protection sold: |  |  |
Index credit default swaps ..................... | $395.2 | $553.4 | $948.6
Contingent Features Certain of our derivative instruments contain provisions that require our debt to maintain an investment grade credit rating from each of the major credit rating agencies. If our debt were to fall below investment grade, it would be in violation of these provisions and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on our derivative instruments in liability positions. The following table presents the aggregate fair value of all derivative instruments with such credit- risk-related contingent features that are in a liability position, the collateral amounts we have posted or received in the normal course of business and the potential collateral we would have been required to return and/or post additionally to our counterparties if the credit-risk-related contingent features underlying these agreements were triggered:
$ in millions | August 31, 2025 | November 30, 2024
Derivative instrument liabilities with credit-risk- related contingent features .................................... | $139.5 | $102.3
Collateral posted ........................................................... | (87.9) | (50.6)
Collateral received ........................................................ | 285.8 | 296.1
Return of and additional collateral required in the event of a credit rating downgrade below investment grade (1) ............................................... | 337.4 | 347.8
(1)These potential outflows include initial margin received from counterparties at the execution of the derivative contract. The initial margin will be returned if counterparties elect to terminate the contract after a downgrade.

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