Government regulations require the strict handling of customer funds used to participate in U.S. futures markets. Funds that customers have deposited in an individual account with their futures commission merchant (FCM) to trade on futures exchanges located in the United States are required to be segregated (held separately) from any of the firm's own funds. The amount segregated will increase or diminish as the customer makes or loses money from trading.
Customer funds are not subject to creditor claims against an FCM should it become financially unstable or insolvent, and customer funds can be transferred to another FCM if necessary. Finally, even though an FCM is required to segregate customer funds, customers still may not be able to recover the full amount of any funds in their account if the firm becomes insolvent and there are insufficient funds available to cover the obligations to all of its customers. Customer accounts are not insured. Customers should ask their broker about account protection and should be aware of the limitations imposed on the protection of the funds in their futures trading accounts.