Jump Financial LLC

The stable outlook is based on our expectation that Jump will maintain good operating performance, capitalization, and liquidity as it continues to expand its trading operations and risk. Specifically, we expect the firm will maintain a RAC ratio above 10%. We also expect nonregulated entities to continue to account for the majority of the firm's earnings and resources and the holding company to maintain liquidity sufficient to meet two years of debt service obligations. Over the next 12 months, we could lower the ratings if: We expect the RAC ratio to fall below 10% on a sustained basis, either because of large member distributions or increased exposures to unconsolidated affiliates; We expect the funding profile to deteriorate; The ratio of

...Jump Financial LLC has a profitable market-making and principal trading business, with strong market shares in large futures exchanges across several major asset classes. However, its business relies on higher-risk and less stable principal trading revenue that depends on market volume and volatility. We believe that the firm's good geographic and asset class diversification only partly offsets this weakness. The firm has strong capitalization, aided by good earnings capacity and retention. The risk-adjusted capital (RAC) ratio was solid at 14.5% as of March 31, 2022. We expect the ratio to remain above 10% over the next 12 months, given our expectation that earnings retention and capital growth will remain commensurate with the growth in trading operations. While earnings can be volatile because of dependence on principal trading, we view positively the firm's demonstrated strong earnings capacity and risk-adjusted returns....

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