Futures

Why we can help

The MF Global disaster represents the greatest assault on the futures industry in anyone’s memory. Everyone is suddenly on notice that there are counterparty risks attending futures trading that few people saw before. But, for subscribers to Rapid Ratings, there was nothing sudden about the vulnerability of MF Global to reversals.

• Our subscribers knew that MF Global was High Risk from the time we initiated coverage in 2009.


• Our subscribers knew that we rated the parent company CCC-equivalent over the course of its last two years and that our financial and operating efficiency measurements were sharply at odds with MF Global’s investment grade status at Moody’s and at Standard & Poor’s.


• Our subscribers knew that our quantitative-only approach meant the degree of creditworthiness Moody’s and Standard and Poor’s ascribed to qualitative factors – in particular, to Mr. Corzine’s leadership – was nothing short of extraordinary.

Please click here to compare our rating history on MF Global with the history at Moody’s and Standard & Poor’s. The futures industry would have been well served to have shared in these insights.

The companies we rate

Rapid Ratings rates almost all of the publicly-reporting parent companies in US futures and listed options clearing, along with a large number in non-US clearing. We rate them as often as they report – usually on a quarterly basis. We rate a small number of clearing subsidiaries that make their balance sheets and income statements public. We rate the ownership companies of exchanges and clearinghouses. We can rate any private companies in the same spaces on the very same metrics, upon confidential receipt of their balance sheets and income statements. Indeed, we already rate one such privately held major clearer. (We routinely rate thousands of private companies for major commercial clients managing counterparty risks among suppliers, vendors, credit customers and depositories.)

Rapid Ratings takes no fees from any of the companies we rate, nor do we engage managements in any prior discussion of their ratings – in order to prevent conflicts of interest and to maintain our total objectivity. We provide a strict and genuine assessment of a company’s competitiveness – its Financial Health Rating (FHR™) – in a way that has correlated closely (inversely) with subsequent default experience over the last two decades. Our singular and timely scoring system can serve the futures industry immediately in exactly the way that recent events have demonstrated the industry needs to be served.

• Proprietary traders, hedge funds, traditional asset managers, non-clearing FCMs, Introducing Brokers, CTAs, CPOs, RFEDs and end users in agriculture, mining and manufacturing will be able to survey the publicly-reporting field for their most appropriate intermediaries.


• Exchanges, clearinghouses, government regulators and end-user trade organizations will be able not only to survey the same field, but also push private companies into confidential disclosures to Rapid Ratings, if not public disclosures altogether.


• Clearers themselves will be able to see how they/their parents stack up against the competition and what offensive or defensive imperatives they face. We will be happy to provide any company with its own/its parent’s updated ratings and reports on a timely, recurring and complimentary basis.

Contact Us

There was more than enough risk attending the futures and listed options markets before the abrupt awakening to counterparty risk. Fortunately for the industry, Rapid Ratings is prepared to offer its rigor, its independence and its promptness in the measurement and management of this newly understood challenge. We welcome your inquiries here.