Why Does the Cash Report Section of my Activity Statement Reflect an Internal Transfer Between Securities and Commodities?
For regulatory purposes, we are required to segregate the securities assets within your account from the commodities assets. Those commodities assets may include the market value of options on futures positions plus any cash required as margin as a result of commodities futures and options on futures positions. Periodically, the margin requirement on your commodities positions will be recomputed and should this requirement decline, cash in excess of that required as commodities margin will be transferred from the commodities side of your account to the securities side. Likewise, should the commodities margin requirement increase, we will transfer any available cash from the securities side to the commodities side. As SIPC insurance is provided to assets on the securities side of your account but not the commodities, this periodic transfer is performed to ensure that your cash balance is afford the greatest protection possible. It should be noted that these cash movements represent journal entries within your account which serve to fully offset each other and therefore have no impact upon the aggregate cash balance within your account (see the Total column within the Cash Report section of the Activity Statement).