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Derivatives
 6 Months Ended
Jun. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
In the normal course of operations, the Company enters into derivative contracts. These derivative contracts primarily consist of FX swaps, FX/commodities options, futures and forwards. The Company enters into derivative contracts to facilitate client transactions, hedge principal positions and facilitate hedging activities of affiliated companies. Derivative contracts can be exchange-traded or OTC. Exchange-traded derivatives typically fall within Level 1 or Level 2 of the fair value hierarchy depending on whether they are deemed to be actively traded or not. The Company generally values exchange-traded derivatives using their closing prices. OTC derivatives are valued using market transactions and other market evidence whenever possible, including market-based inputs to models, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. For OTC derivatives that trade in liquid markets, such as forwards, swaps and options, model inputs can generally be verified and model selection does not involve significant management judgment. Such instruments are typically classified within Level 2 of the fair value hierarchy.
The Company does not designate any derivative contracts as hedges for accounting purposes. U.S. GAAP guidance requires that an entity recognize all derivative contracts as either assets or liabilities in the unaudited condensed consolidated statements of financial condition and measure those instruments at fair value. The fair value of all derivative contracts is recorded on a net-by-counterparty basis where a legal right to offset exists under an enforceable netting agreement. Derivative contracts are recorded as part of “Receivables from broker-dealers, clearing organizations, customers and related broker-dealers” and “Payables to broker-dealers, clearing organizations, customers and related broker-dealers” in the Company’s unaudited condensed consolidated statements of financial condition.
The fair value of derivative contracts, computed in accordance with the Company’s netting policy, is set forth below (in thousands):
June 30, 2021December 31, 2020
Derivative contractAssetsLiabilities
Notional
Amounts1
AssetsLiabilities
Notional
Amounts1
FX/commodities options$— $— $— $74 $— $4,844 
Forwards2
690 653 216,829 295 215 302,141 
FX swaps4,553 4,551 610,762 562 319 513,588 
Futures— 1,217 18,307,688 — 926 6,113,220 
Total$5,243 $6,421 $19,135,279 $931 $1,460 $6,933,793 
__________________________
1Notional amounts represent the sum of gross long and short derivative contracts, an indication of the volume of the Company’s derivative activity, and do not represent anticipated losses.
2Excludes $30 thousand derivative assets and $7 thousand derivative liabilities classified as Assets held for sale and Liabilities held for sale, respectively, as of June 30, 2021.
Certain of the Company’s FX swaps are with Cantor. See Note 14—“Related Party Transactions,” for additional information related to these transactions.
The replacement costs of contracts in a gain position were $5.2 million and $0.9 million, as of June 30, 2021 and December 31, 2020, respectively.
The following tables present information about the offsetting of derivative instruments (in thousands):
June 30, 2021
Gross
Amounts		Gross
Amounts
Offset
Net Amounts
Presented
in the
Statements
of Financial
Condition1
Assets
Forwards2
$948 $(258)$690 
FX swaps5,729 (1,176)4,553 
Futures75,703 (75,703)— 
Total derivative assets$82,380 $(77,137)$5,243 
Liabilities
FX swaps5,727 (1,176)4,551 
Forwards2
911 (258)653 
Futures76,920 (75,703)1,217 
Total derivative liabilities$83,558 $(77,137)$6,421 
December 31, 2020
Gross
Amounts		Gross
Amounts
Offset
Net Amounts
Presented
in the
Statements
of Financial
Condition1
Assets
FX/commodities options$74 $— $74 
Forwards338 (43)295 
FX swaps583 (21)562 
Futures41,257 (41,257)— 
Total derivative assets$42,252 $(41,321)$931 
Liabilities
FX swaps$340 $(21)$319 
Forwards258 (43)215 
Futures42,183 (41,257)926 
Total derivative liabilities$42,781 $(41,321)$1,460 
__________________________
1There were no additional balances in gross amounts not offset as of June 30, 2021 and December 31, 2020.
2Excludes $30 thousand derivative assets and $7 thousand derivative liabilities classified as Assets held for sale and Liabilities held for sale, respectively, as of June 30, 2021.
The change in fair value of derivative contracts is reported as part of “Principal transactions” in the Company’s unaudited condensed consolidated statements of operations. The change in fair value of equity options related to marketable securities is included as part of “Other income (loss)” in the Company’s unaudited condensed consolidated statements of operations.
The table below summarizes gains and (losses) on derivative contracts (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
Derivative contract2021202020212020
Futures$3,321 $2,724 $7,155 $5,488 
FX/commodities options78 143 164 198 
Forwards(63)116 (28)(1,152)
FX swaps140 89 138 325 
Gains$3,476 $3,072 $7,429 $4,859