Why is my trading account separated?

Some things in life go great together, such as peanut butter and jelly, Donny and Marie, and even stocks & options. The same applies to your securities (stocks & options), futures account, and cryptocurrency account. However, since futures and cryptocurrencies are not securities, they are separated from your securities account held at our clearing firm, Apex Clearing. Since futures and digital currencies are completely different asset classes, they are handled differently than a typical portfolio of stocks & options.

A Clear(ing) difference

Futures and Cryptocurrencies clear differently 

You are probably wondering why your futures or cryptocurrency account needs to be separated from your securities account in the first place? In short, cryptocurrencies and futures clear differently from securities. Equity and equity options cleared through our clearinghouse, Apex Clearing. Meanwhile, cryptocurrency trades clear through our cryptocurrency custodian, Zero Hash. Although you may be placing cryptocurrency trades through tastytrade, Zero Hash facilitates those trades. Lastly, futures and options on futures clear through a futures commission merchant, widely known in the industry as an FCM. tastytrade’ FCM is StoneX (formerly known as FCStone), and they handle the clearing and custody of all futures trading. 

Fund handling between accounts

Cash mainly resides in your securities account and sweeps accordingly

Although your account is separated in the background, tastytrade provides a combined account view for your securities, cryptocurrencies, and futures trading for a seamless trading experience. Funds primarily reside in your securities account and are swept between your crypto account held at Zero Hash or your futures account held at StoneX daily when positions mark-to-market.

Additionally, when there is a margin deficit in the futures account, funds sweep from the securities account to the futures account. At times, you may see a Margin Call line item listed on your daily futures statement, indicating the deficit. However, that does not necessarily mean your account is in a margin call as long as your buying power on the platform is positive. If there is any margin excess in the futures account, the excess margin funds are swept back into the securities account. 

Please consider the following about cash sweeps

The sweeping of funds between accounts occurs behind the scenes, but there are some things you need to keep tabs on if you decide to trade securities and futures.

  • For pattern day trader (PDT) purposes, the securities account must maintain an account value of at least $25,000. The value of your futures positions at StoneX or crypto positions at Zero Hash does not count towards the $25,000 requirement.
  • Funds in the futures account are not included in your securities starting day trade buying power.
  • When trading in a margin account, cash swept from your securities account to the futures account or crypto account could potentially result in a debit cash balance in the securities account. Debit cash balances are subject to margin interest charges. To view how to calculate the interest on a margin debit balance, please click here.
  • SIPC insures securities accounts. Futures & Crypto accounts are not insured. 

Why is my account balance on my Apex monthly statement wrong?

When trading futures and/or crypto, your positions are held between firms

Are you looking at your monthly Apex statement and wonder why it may not reflect your actual account balance? Well, it's not a miscalculation, and you're not missing any money. Again, it is due to the separation of your securities account (Apex), your crypto account (Zero Hash), and your futures account (StoneX).

Please refer to your Apex monthly statement and your latest futures trade confirmation for the month you're looking up to reconcile your total account balance. You may reconcile your total account balance by taking the sum of your closing balance on your Apex monthly statement, the current crypto account net liq listed at the top of the crypto trading mode in the desktop platform, and the Total Equity line item in your latest futures confirmation.

Margin accounts above $25,000 could receive an EM Call

If the cash sweep causes your securities account to drop below $25K

A margin account eligible to maintain a Pattern Day Trader status and valued over $25,000 can still receive an Equity Maintenance (EM) due to the cash sweep. When the cash sweep causes your securities account to drop below $25,000, an EM call will issue. To learn more about EM calls, please click here.

Let’s use a $30,000 trading account that is flagged and eligible as a PDT. The account goes long an /ES contract with a $5,500 margin requirement. The account owner decides to hold the /ES overnight, and $5,500 is swept from the securities account to the futures account to satisfy the overnight requirement. Due to the sweep, the securities account would drop to $24,500 and receive a $500 EM call the next trading day due to the minimum equity requirements needed to maintain an account with a PDT status. The same logic applies to any cryptocurrency positions held overnight, as the value paid for any crypto position would sweep into your crypto account.

When trading cryptocurrencies or futures, please keep in mind any effects to your securities account from an overnight cash sweep due to accumulating long crypto positions, overnight requirements for holding a future(s), or a futures position marking to market.