# JAG TRADING L.L.C. X-17A-5 (2024-04-11) — Broker-dealer annual report

- Company: JAG TRADING L.L.C.
- Form: X-17A-5
- Filed: 2024-04-11
- Period: 2023-12-31
- Accession: 0001144633-24-000002
- CIK: 1144633
- File #: 8-53408
- Type: Broker-dealer
- Material weakness: No
- Auditor: Michael Coglianese CPA, P.C.
- Auditor location: Bloomingdale, IL
- Contact: Jacqueline Sloan
- Phone: 312-431-0014
- Email: jackie@jackiesloaninc.com
- Website: jackiesloaninc.com
- Signed by: Craig Bauer (Managing Member)

Original filing: https://www.sec.gov/Archives/edgar/data/1144633/000114463324000002/public6.pdf

---

{0}------------------------------------------------

# UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

# ANNUAL REPORTS FORM X-17A-5 PART III

| OMB APPROVAL              |  |
|---------------------------|--|
| OMB Number: 3235-0123     |  |
| Expires: Nov. 30, 2026    |  |
| Estimated average burden  |  |
| hours per response:<br>12 |  |

|  |  | SEC FILE NUMBER |  |
|--|--|-----------------|--|
|--|--|-----------------|--|

FACING PAGE

Information Required Pursuant to Rules 17a-5, 17a-12, and 18a-7 under the Securities Exchange Act of 1934

| FILING FOR THE PERIOD BEGINNING 01/01/2023<br>MM/DD/YY<br>A. REGISTRANT IDENTIFICATION<br>NAME OF FIRM: JAG Trading LLC<br>TYPE OF REGISTRANT (check all applicable boxes):<br>Broker-dealer<br>Check here if respondent is also an OTC derivatives dealer<br>ADDRESS OF PRINCIPAL PLACE OF BUSINESS: (Do not use a P.O. box no.)<br>7125 Orchard Lane, Suite 300<br>(No. and Street)<br>West Bloomfield<br>MI<br>(State)<br>(City) | AND ENDING 12/31/2023<br>MM/DD/YY<br>1 Major security-based swap participant |            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                              |            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                              |            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                              |            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                              |            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                              |            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                              |            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                              |            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                              | 48322      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                     | (Zip Code)                                                                   |            |
| PERSON TO CONTACT WITH REGARD TO THIS FILING                                                                                                                                                                                                                                                                                                                                                                                        |                                                                              |            |
| 312-431-0014<br>Jacqueline Sloan                                                                                                                                                                                                                                                                                                                                                                                                    | Jackie@JackieSloanInc.com                                                    |            |
| (Name)<br>(Area Code - Telephone Number)                                                                                                                                                                                                                                                                                                                                                                                            | (Email Address)                                                              |            |
| B. ACCOUNTANT IDENTIFICATION                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                              |            |
| INDEPENDENT PUBLIC ACCOUNTANT whose reports are contained in this filing*                                                                                                                                                                                                                                                                                                                                                           |                                                                              |            |
| Michael Coglianese CPA, P.C.                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                              |            |
| (Name - if individual, state last, first, and middle name)                                                                                                                                                                                                                                                                                                                                                                          |                                                                              |            |
| 125 East Lake Street<br>Bloomingdale                                                                                                                                                                                                                                                                                                                                                                                                |                                                                              | 60108      |
| (Address)<br>(City)                                                                                                                                                                                                                                                                                                                                                                                                                 | (State)                                                                      | (Zip Code) |
| 10/20/2009                                                                                                                                                                                                                                                                                                                                                                                                                          | 3874                                                                         |            |
| (Date of Registration with PCAOB)(if applicable)                                                                                                                                                                                                                                                                                                                                                                                    | (PCAOB Registration Number, if applicable)                                   |            |
| FOR OFFICIAL USE ONLY                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                              |            |

Claims for exemption from the requirement that the annual reports of an independent public accountant must be supported by a statement of facts and circumstances relied on as the basis of the exemption. See 17 CFR 240.17a-5(e)(1)(ii), if applicable.

Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

{1}------------------------------------------------

### OATH OR AFFIRMATION

| financial report pertaining to the firm of JAG frading LLC<br>12/31                                                                                                          |  |                      | , as of<br>, 2 923 . , is true and correct. I further swear (or affirm) that neither the company nor any |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--|----------------------|----------------------------------------------------------------------------------------------------------|
| partner, officer, director, or equivalent person, as the case may proprietary interest in appeacount classified solely                                                       |  |                      |                                                                                                          |
| as that of a customer. Stuart Robertson<br>NOTARY PUBLIC - STATE OF MICHIGAN<br>County of Oakland<br>My Commission Expires August Q, 2027<br>Acting in the County of OG-Ulas |  | Signaturer<br>Title: |                                                                                                          |
| Stoury Pages . untilled and                                                                                                                                                  |  | Managing Mamber      |                                                                                                          |

This filing \* contains (check all applicable boxes):

- (a) Statement of financial condition.
- (b) Notes to consolidated statement of financial condition.
- (c) Statement of income (loss) or, if there is other comprehensive income in the period(s) presented, a statement of comprehensive income (as defined in § 210.1-02 of Regulation S-X).
- (d) Statement of cash flows.
- [e) Statement of changes in stockholders' or partners' or sole proprietor's equity.
- [1) (f) Statement of changes in flabilities subordinated to claims of creditors.
- (g) Notes to consolidated financial statements.
- (h) Computation of net capital under 17 CFR 240.15c3-1 or 17 CFR 240 18a-1, as applicable.
- (i) Computation of tangible net worth under 17 CFR 240.18a-2.
- [j] Computation for determination of customer reserve requirements pursuant to Exhibit A to 17 CFR 240.15c3-3.
- (k) Computation for determination of security-based swap reserve requirements pursuant to Exhibit B to 17 CFR 240.15c3-3 or Exhibit A to 17 CFR 240.18a-4, as applicable.
- (1) Computation for Determination of PAB Requirements under Exhibit A to § 240.15c3-3.
- [m] Information relating to possession or control requirements for customers under 17 CFR 240.15c3-3.
- [n] Information relating to possession or control requirements for security based swap customers under 17 CFR 240.15c3-3(p)(2) or 17 CFR 240.18a-4, as applicable.
- 1 10) Reconciliations, including appropriate explanations, of the FOCUS Report with computation of net worth under 17 CFR 240.15c3-1, 17 CFR 240.18a 1. or 17 CFR 240.18a-2, as applicable, and the reserve requirements under 17 CFK 240.15c3-3 or 17 CFR 240.18a-4, as applicable, if material differences exist, or a statement that no material differences exist.
- [p] Summary of financial data for subsidiaries not consolidated in the statement of financial condition.
- (q) Dath or affirmation in accordance with 17 CFR 240.17a-5, 17 CFR 240.17a-12, or 17 CFR 240.18a-7, as applicable.
- (r) Compliance report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a-7, as applicable.
- [s] Exemption report in accordance with 17 CFR 240.17a-5 or 17 CFR 240.18a 7, as applicable.
- (t) Independent public accountant's report based on an examination of the statement of financial condition.
- 1 (u) Independent public accountant's report based on an examination of the financial statements under 17 CFR 240.17a-5, 17 CFR 240.18a-7, or 17 CFR 240.17a-12, as applicable.
- [v] Independent public accountent's report based on an examination of certain statements in the compliance report under 17 CFR 240.17a-5 or 17 CFR 240.18a 7, as applicable.
- [w] Independent public accountant's report lased on a review of the exemption report under 17 CFR 240.27a-5 or 17 CFR 240.18a-7, as applicable.
- [x] Supplemental reports on applying agreed upon procedures, in accordance with 17 CFR 240.175-2, as applicable.
- [y) Report describing any material inadequacies found to exist or found to have existed since the date of the previous audit, or a statement that no material inadequacies exist, under 17 CFR 240.17a-12(k).
- J (z) Other.
- \*\* To request confidential treatment of certain portions of this filing, see 17 CFR 240.180-7(d)(2), as applicable.

{2}------------------------------------------------

# *JAG Trading, LLC*

*(A Delaware limited Liability Company) Financial Statements And Independent Audit Report December 31, 2023* 

{3}------------------------------------------------

# **JAG Trading, LLC**  (A Delaware Limited Liability Company) Index December 31, 2023

|                                                            | Page |
|------------------------------------------------------------|------|
| Report of Independent Registered Public Accounting Firm  I |      |
| Financial Statements                                       |      |
| Statement of Financial Condition  2                        |      |
| Notes to Financial Statements  3-10                        |      |

The accompanying notes are an in1egral part of these financi al statements

{4}------------------------------------------------

![](_page_4_Picture_0.jpeg)

### **Report of Independent Registered Public Accounting Firm**

To the Sole Member of JAG Trading, LLC

We have reviewed management's statements, included in the accompanying Exemption Report of Brokers and Dealers ("Exemption Reportft) pursuant to SEC Rule 17a-5, in which JAG Trading, LLC did not claim an exemption under paragraph (k) of 17 C.F.R. § 240.15c3-3, and is filing its Exemption Report as a Non-Covered Firm relying on Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 because JAG Trading, LLC limits its business activities exclusively to proprietary trading, and JAG Trading, LLC (1) did not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, (other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of Rule 15c2-4 and/or funds received and promptly transmitted for effecting transactions via subscriptions on a subscription way basis where the funds are payable to the issuer or its agent and not to JAG Trading, LLC); (2) did not carry accoun s of or for customers: and (3) did not carry PAS accounts (as defined in Rule 15c3-3) throughout the most recent fiscal year without exception. JAG Trading, LLC's management is responsible for compliance with the exemption provisions and its statements.

Our review was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and accordingly, included inquiries and other required procedures to obtain evidence about JAG Trading, LLC's compliance with the exemption provisions. A review is substantially less in scope than an examination, the objective of which is the expression of an opinion on management's statements. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to management's statements referred to above for them to be fairly stated, in all material respects based on the provisions set forth in Footnote 74 of the SEC Release No. 34-70073 adopting amendments to 17 C.F.R. § 240.17a-5 related to the Non-Covered Firm Provision.

Bloomingdale, IL April 10, 2024

{5}------------------------------------------------

## **JAC Trading, LLC (A Delaware Limited Liability Company) Statement of Financial Condition as of December 31, 2023**

| Assets                                                |                   |
|-------------------------------------------------------|-------------------|
| Cash                                                  | \$ I 00,864       |
| Fixed Assets, net of depreciation                     | 102,628           |
| Securities owned:                                     |                   |
| Marketable securities, at market value                | 65.938.558        |
| Bonds                                                 | 205.622           |
| Options, at fair value                                | l.J 09 998        |
| Total securities owned                                | 67,254,178        |
| Due from broker                                       | 41,914.535        |
| Accrued interest and dividend receivable              | 356.363           |
| Prefcn-ed stock                                       | 10.000            |
| Total Assets                                          | \$ I 09.718.568   |
|                                                       |                   |
| Liabilities                                           |                   |
| Securities sold shon:                                 |                   |
| Marketable securities sold short, at market value     | \$<br>64,836,885  |
| Options sold sho11, at fair value                     | 3 968 237         |
| Total positions sold. net yet purchased ar fair value | 68,805,122        |
| Accrued liabilities                                   | 104.214           |
| Total Liabilities                                     | 68,909,336        |
| Member equity                                         | 40.829.232        |
| Total Liability and Member Equity                     | s I 09, 7J.R,56.8 |

The accompanying notes are an integral pan of1hese financial statemems

{6}------------------------------------------------

#### **JAG Trading, LLC (A Delaware** limited **Liability Company)** 1 01es co the Financial St:Hemcnts Y car Ended December 3 I. 2023

#### **i\'OTE:** I **Organization**

JAG Trading, L.L.C. (the "'Company''), A Delaware limited liability company was formed on June 15. 200 I. The business of the Company is to engage in the speculative trading of equitics. index options, futures and options thereon, for its own account on organized exchanges in the United States of America. TI1e Company engages in proprietary trading activities. The Company is registered as a broker- dealer with the Securities and Exchange Commission ("'SEC') and is a member of the Chicago Stock Exchange ( .. CHx··).

Although the Company is not exempt from Ruic I 5c3-3. it does not transact business in securities with or for customers and it docs 1101 carry margin accounts. credit balances of securities for any person defined as a customer under Rule l 7a-5(c)(4). The Company affects transactions only with other broker-d~lcrs and carries its trading accounts with a registered clearing partner.

The financial statements arc prepared on a basis consistent with accounting principles generally accepted in the United States of America. Th<! following is summary of the Company's significant accounting policies.

#### **NOTE2 Significant Accounting Policies**

The preparation of financial statements in confom1iry with generally accepted accounting principles in the United States of America requires management to makc estimates and assumptions that affect the reported amoums of assets and liabilities and disclosures of contingent ,bSCts and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the rcponing period. Actual n:sults could differ from those estimates.

In the nonnal course of business, as part of its trading strategy, the Company enters into transactions in exchange equity stocks and equity debt securities. including options thereon. These derivative financial contracts are used to adjust the risk and return of U1eir trading strategy. Proprietary trading of principal transactions together with related revenues and expenses arc recorded on trade ciatc.

Foreign currency transactions: The Company's functional currency is the lJ.S. dollar: ho\\"ever. it transacts business in currencies other than the U.S. dollar. Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the rates in effect at the I.late of the statement or financial condition. Income and expense items denominated in currcm:ies other than the U.S. dollar are translated into U.S. dollars at the rat.:s in effect during the period. Gains and lo\$ . .:s resulting from the translation of transactions denominated in foreign currencies to U.S. dollars are reported in income currently.

Securities and derivatives transactions: Sccutitics and de1ivative 1ransat.:1ions and related revenues and expenses are recorded at fair value un a trade-date basis as if they had settled. Realized gains and losses and change in unrealized gains and losses are reflected in trading principal transactions in the statement of operations. Related trading expenses are recorded on a trade-date basis as transactions occur.

The Company recognizes interest paid and earned on the accrual basis and dividend income is recognized on th.: exdividend date. The Company accounts for it~ financing activities on an accrual basis.

Due from and due to broker dealer: Receivables and payables relating to trades pending settlement are neued in receivables from and payables to clearing brokers in the statement of linancial condition. nened by clearing broker. The Company may obtain short-tem1 financing against its positions. Additionally. when the requirements are met, the Company offsets certain amounts recognized for cash collateral receivables or payables against fair value amounts recognized for net derivative positions held m the i-ame clearing broker.

Income Taxes: A Limited Liabili1y Company doe,- not pay federal income taxes. The Company is treated for Federal and State income taxes as if it was a partner. hip reporting their income under the Sub Chapter K provision of the

{7}------------------------------------------------

**JAG Trading, LLC (A Delawa re limited Liabilit)' Company)**  Notes to the Financial Statements Year Ended December 31, 2023

#### **NOTE 2 Significant Accounting Policies** *(* continued)

Internal Revenue Code of 1986. The member is responsible for reponing their pro rata share of the profits or losses on their tax returns. The Company reports their income for taxes on a calendar year basis.

The Company applies the provision of F ASB ASC 740, Income Taxes. which provides guidance for how uncertain tax positions should be recognized. measured, present and disclosed in the financial statements. F ASB ASC 740 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Company's financial statements to detennine whether the tax positions are more-than-likely-than-not of being sustained by the applicable tax authority. The managing member has concluded there is no tax expense to be recorded by the Company for the year ended December 31, 2023. This detem1ination will always be subject to ongoing reevaluation as facts and circumstances may require. The Company's past thrc"e tax years n::main ~ubject to income tax audits.

Depreciation: Depreciation is provided on a double declining balance following MACRS lives for all depreciable assets. The estimated useful lives arc three years to live years for computers and related software. The Company writes off immediately all computer equipment.

#### **NOTE3 Clearing Agreeml:'nts**

The Company has a joint back office (JBO) clearing agreement with Wedbush Securities. The agreement allows JBO participants to receive favorable margin treatment as compared to a regular customer. As part of the agreement the Company has invested 10.000 in a preferred interest in Wedbush Sernritics. The Company"s interest in Wcdbush Securities is re fl ected as a preferred stock on the balance sheet. Under the rules of the Chicago Stock Exchange, (CHX) the Company is required to maintain a minimum net liquidly rrading value of S I million in \Vedbush Securities and is exclusive of the preferred stock value of SI 0.000.

### **l\'OTE4 Fair Value ~easurcments**

Fair value is the ptice that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or. in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market, income or cost approach, as specified by FASB ASC 820, are used to measure.

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:

Level I inputs are quoted prices (unadjusted) in active markets for identical assets or a liability the Company has the ability to access.

Level 2 inputs are inputs (other than quoted prices included within level I) that are observable for the asset or liability. either directly or indirectly.

Level 3 are unobservable inputs for the asset or liability and rely on management's own assumptions about the assumptions that market participants would use in pricing the asset or liability.

In certain cases. the inputs used to measure fair value may fa ll into different levels of the fair value hierarchy. In such cases. an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair measurement. The Company's assessment of significance of a particular input to the fair value measure in its entirety requires judgment and considers factors specific to the investment.

{8}------------------------------------------------

### JAG Trading, LLC (A Delaware limited Liability Company) Notes to the Financial Statements Year Ended December 31, 2023

#### NOTE 4 Fair Value Measurements (continued)

The following describes the valuation techniques used by the Company to measure different financial instruments at fair value and includes the level within the fair value hierarchy in which the financial instrument is categorized.

Equity securities, equity options are recorded at fair value based on quoted market prices, which are generally the exchange settlement prices. These financial instruments are classified as level 1 in the fair value hierarchy. The following table presents the Company's fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2023.

| Assets                               |       |            | Fair Value Measurements Using                                         |            |                                                      |  |                                                  |  |
|--------------------------------------|-------|------------|-----------------------------------------------------------------------|------------|------------------------------------------------------|--|--------------------------------------------------|--|
|                                      | Total |            | Quoted Prices in<br>Active Markets for<br>Identical Assets<br>Level 1 |            | Significant Other<br>Observable<br>Inputs<br>Level 2 |  | Significant<br>Unobservable<br>Inputs<br>Level 3 |  |
| Securities owned                     |       |            |                                                                       |            |                                                      |  |                                                  |  |
| Marketable securities                | A     | 65.938.558 | S                                                                     | 65.938,558 | S                                                    |  | S                                                |  |
| Bonds                                |       | 205 622    |                                                                       | 205.622    |                                                      |  |                                                  |  |
| Options, at fair value               |       | 1.109.998  |                                                                       | 1.109.998  |                                                      |  |                                                  |  |
|                                      | 1     | 67.254.178 | 1                                                                     | 67,254,178 |                                                      |  |                                                  |  |
| Liabilities                          |       |            |                                                                       |            |                                                      |  |                                                  |  |
| Securities sold short                |       |            |                                                                       |            |                                                      |  |                                                  |  |
| Marketable securities sold short     | S     | 64.836.885 | S                                                                     | 64.836.885 | S                                                    |  | S                                                |  |
| Options sold short, at fair value    |       | 3.968.237  |                                                                       | 3.968.237  |                                                      |  |                                                  |  |
| Futures contracts- open trade equity |       | 68.805.122 |                                                                       | 68.805.122 | 1                                                    |  |                                                  |  |

The Company assesses the levels of the investment at each measurement date, and transfers between levels are recognized on the actual date of the event or circumstances that cause the transfer in accordance with the Company's accounting policy.

The following describes the valuation techniques used by the Company to measure different financial instruments at fair value and includes the level within the fair value hierarchy in which the financial instrument is categorized.

#### Valuation Techniques

Investments in Securities and Securities Sold Short

The Partnership values investments in securities sold short that are freely tradable and are listed on a national securities exchange or reported on the NASDAQ national market at their last business day of the year.

Many cash and over-the-counter ("OTC") contracts have bid and ask prices that can be observed in the marketplace. Bid prices reflect the highest price that the marketplace participants are willing to pay for an asset. Ask prices represent the lowest price that the marketplace participants are willing to accept for an asset. For securities whose inputs are based on bid-ask prices, the Partnership's valuation policies do not require that fair value always be a predetermined point in the bid-ask range. The Partnership's policy for securities traded in the OTC markets and listed securities for which no sale was reported on that date are valued at their last reported "bid" price if held long, and last reported "asked" price if sold short.

{9}------------------------------------------------

### ,IAG Trading, LLC (A Delaware limited Liabili~ Company) Notes 10 the Financial Statements Year Ended December 3 I. 2023

#### Fair Value t\leasurcmcnts (continued)

To the extent these securities 3n: acti\'ely traded and ,·aluation adjustments are not applied. they are cacegorized in Level I of che fair ,·alue hil·rarchy. ccuricics traded on inacti\'e markets or \'alued by reference ro similar inscrumems are generally categorized in Le\'el 2 or the fair value hierarchy.

#### Corporate Bonds

The fa ir value of corporate bonds is estimated using recently executed transactions. market price quotations (where observable). bond spreads or credit dcfo11lt swap spreads. The spread dma used nre for the same maturity as the bond. Ir the spread data does not reference the issuer. th,·n data that references a compar:ible issuer is used. When observable price quotations are not available. fa ir vnlue is determined based on cash llow models with yield curves, bond or single nam<:: credit default swap spreads and rcco\'ery rate~ based on collat<::rnl \'Ulucs as key inputs. Corporate bonds :ire generally categorized in Lewi *1* of the fair vnlue hierarchy. In instances where significant inputs are unobservable. they are categorized in Level 3 of the hierarchy.

#### Options Contracts

Options contracts Lr.lded on a commodities exchange or board of trade arc \'alued nt the last sale price at the close of trading on such exchange or bonrd of trade or. if there was no sale on the applicable commodities exchange or board of trade on such day. at the mean between thc highesr quoted bid and lowest quoted asked prices on such exchange or board of trade as ofthc close of trading on the ,·aluation date.

#### **!'WTES** Net Capital Rcquircmcnrs

The Company is subject 10 the SEC Unifom1 Net Capital Rule (Rule I 5c3-1) which requires the maintenance of minimum net capital and requires that the ratio ofaggrcgmc indebtedness to net capital. both as defined shall not exceed 15 to I (and the rule of the applicable exchange also pro\'ides that equity cupital may not he withdrawn or cash di\'idends paid if the resulting net capital ratio would exceed IO 10 l ). Under this rule. the Company is required to maintain .. minimum net capital'' equivalent to SI 00.000 or 6 2,3% of --aggrcgate indebtedness:· whichever is greater. *as* these 1enns are defined. At December 31. 2023. the Company had net capi131 of Sl7,77~.133 which wasSl7,671.133 in excess of its required net capital and its aggregate indebtedness 10 net capital ratio was .59 LO I.

#### NOTE6 Principal risks associakd with fina ncial instrum~ms

In 1he nonnal course of business, the Company has in\'estme111s and enters into various financial transactions where the risk of potemial loss due to market risk. credit risk and other risks can equal or exceed the rel med amounts recorded. The success of any investment activity is in llucnced by general economic conditions that may affect the level and volatility of equity prices. credit spreads. interest rates and the extent and timing of investor panicipation in the markets for both equity and interest rate sensitive in\'e~tments. Unexpected volmility or illiquidity in the markets in which the Company directly or indirectly holds positions could impair its ability 10 cafT) 0111 its business and could cause losses co be incurred. See below for a detailed description of selected principal risks.

*Market risk* represents the potential loss that can be caused by increases or dccreao;es in the foir \'alue of inwstments. The Company·s exposure 10 market risk ,s directly mlluenced by a number of factors, including volatility and liquidity of the m:irkets in which the fin:mcial instruments arc traded.

*Credi, risk* represents the potential loss that would occur if counterparties fail to perfon11 pursuant to the terms of their obligations. In addition to its investments. the Company is subject to credit risk *to* the extent a custodian with whom its conducts business is unable 10 fulfill contractual obligations.

{10}------------------------------------------------

#### JAG Trading, LLC (A Delaware limited Liability Company) Notes to the Financial Statements Year Ended December 31, 2023

#### NOTE 6 Principal risks associated with financial instruments (continued)

Liquidity risk is the risk that the Company will not be able to raise fulfill its commitments, including inability to sell investments quickly or at close to fair value.

Equity risk is the risk that the market value of the financial instruments may decline due to general market conditions, such as political or macroeconomic factors. Additionally, the financial instruments may decline in value due to specific factors affecting a related industry or industries.

Interest rate risk is the risk the value of financial instruments may fluctuate as a result of changes in market interest rates.

Currency risk is the risk that the value of the financial instruments (denominated in or subject to exposure of foreign currencies) may fluctuate as a result of changes in foreign exchange rates. The Company is subject to the risk that those foreign currencies may decline in value relative to the base currency of the funds.

#### NOTE 7 Derivative Contracts

In the normal course of business, the Company utilizes derivative contraction with its trading activities. Investments in derivative contracts are subject to additional risks that can result in a loss of all or part of an investment. The Company's derivative activities are classified by the following primary underlying risks: interest rate, credit, foreign currency exchange rate, commodity price risks. In addition to its primary underlying risks, the Company is also subject to additional counterparty risk due to inability of its counterparties to meet the terms of their contracts.

Since the derivatives held or sold by the Company are for speculative trading purposes, the derivative instruments are not designated as hedging instruments under the provisions of ASC 815 and related pronouncements. Accordingly, all realized gains and losses, as well as any change in net unrealized gains or losses on open positions from the preceding period, are recognized as part of the Company's trading principal transactions revenue on the statement of income.

#### Futures contracts

The Company is subject to equity and commodity price risk and foreign currency exchange rate risk in the normal course of pursuing its investment objectives. The Company may use futures contracts to gain exposure to, or hedge against, changes in the value of equities and commodities, interest rates or foreign currencies. A futures contract represents a commitment for the fiture purchase or sale of an asset at a specified date.

The purchase and sale of futures contracts requires margin deposits with a Futures Commission Merchant ("FCM") equal to a certain percentage of the contract anount. Subsequent payments (variation margin) are made or received by the Company each day, depending on the daily fluctuations in the contract. The Company recognizes a gain or loss equal to the daily variation margin. Futures contracts may reduce the Company's exposure to counterparty risk since futures contracts are exchange-traded: and the exchange's clearinghouse, as the counterparty to all exchange-traded futures, guarantees the futures against default.

The Commodity Exchange Act requires an FCM to segregate all customer transactions and assets from the FCM's proprietary activities. A customer's cash and other equity deposited with an FCM are considered commingled with all other customer Companys subject to the FCM's segregation requirements. In the event of an FCM's insolvency, recovery may be limited to the Company's pro rata share of segregated customer Companys available. It is possible that the recovery amount could be less than the total of cash and other equity deposited.

{11}------------------------------------------------

### JAG Trading. LLC (A Delaware limited Liability Compun\_y) ~Oles to the Financial Stutements Y car Ended December 3 I. 2023

#### Derivative Contracts (continued)

#### *Opli0ll.1'*

The Company is subject to equity and co111111odity price risk. and foreign currency exchange rate risk in the nomial course of pursing its in\!e~m1ent objective~. The Company may enter into options 10 speculate on the price movements of the financial instrument. commodity. or currency underlying the option. or for use as an economic hedge against certain equity positions held in the Company·~ ponfolio holdings. Option comr:icts purchased give the Company lhc right. but not the obligation. to buy or sell within a limited cime. a financial instrument, conm10dity or currency at a contracted price that may also be settled in cash. based on differentials between specified indices or price~.

Options wrinen obligate the Co111pany 10 buy or sell wi1hin a limited time, a financial instrument, commodity or currency at a contracted price that may also be settled in cash. based on differentials berween specified indices or prices. When the Company writes an op1ion. an amount equal to the premium received by the Company is recorded as a liability and is subsequently adjusted to the current fair value of1he option written. Options written by thc Company may expose the Company to market risk of an unfaYvrnble change in the finnncial imtrument underlying the written option.

For some OTC options. the Company may be exposed to countcrparty risk from the potential that a seller of an option contract docs not sell or purchase the underlying ?.sser as agreed under the tcm,s of the option contract. The maximum risk of los\$ from counterpany risk 10 1hc Company is the fair value of the.: contracts and the premiums paid 10 purchase its open option contracts. In these instances. thi:: Company consider~ the .-rc;:dit risk of the intennediary countcrparty to its options 1rnnsac1ions in evaluating potential credit risk.

#### **NOTES** Due from Broker-Dealers

Rccei\'able from broker-dealers at December 31. 2023. consist of the following:

Broker-dealer \$41.914.535

Thl· amount receivable from broker-de'\lcrs is collectible: cash primarily from trading of stock and stock options. The cash balance receives interest at less than the broker call rate. The Company clears all transactions through another broker dealer pursuant to their clearing agreement. Al December 31. 2023. substantially all assets of the Company are deposited with the clearing broker. Payables 10 clearing broker relate to thl.' proprietary transactions ch:arcd through such clearing brokers. which amount~ nrc t·ollarcralized by st:curitics and derivative tinancinl instruments held by the Company.

#### **NOTE9** I **ndcmnifications**

In the nonnal course of its busin~ss. the Compan~ indenmifics cer.ain ser\ ice providers. such as clearing brokers, again~t specified potential losses in connection with their acting as 311 agent of, or providing ser\·ices to. the Company. Thr maximum potential amount of future payments that the Company could be required to make under these indemnifications cannot be estimated. I lowever. the Company believes that it is unlikely it will have 10 make material payments under these arrangements and has not recorded any contingen1 liability in the financial statements fo r these indemni ticntions.

{12}------------------------------------------------

#### JAG Trading, LLC (A Delaware limited Liability Company) Notes to the Financial Statements Year Ended December 31, 2023

#### Concentrations of Credit Risk NOTE 10

The Company is engaged in various trading and brokerage activities in which counterparties primarily include brokerdealers, banks, and other financial institutions. In the event counterparties do not fulfill their obligations, the Company may be exposed to risk.

The Company invests in exchange-traded stocks for speculative purposes. These contracts are marked to market daily and involve elements of market and credit risk. The Company's contracts are all exchange-traded, whereas the Chicago Stock Exchange ("CHX") acts as the counterparty of the specific transactions and, therefore, bear the risk of delivery to and from the counterparty.

The risk of default depends on the creditworthiness of the Chicago Stock Exchange ("CHX"), who guarantees the transactions. Management does not consider this credit risk to be significant.

#### NOTE 11 Guarantees

FASB ASC 460, Guarantees, requires the Company to disclose information about its obligations under certain guarantee arrangements. FASB ASC 460 defines guarantees as contracts and indemnification agreements that contingently require a guarantor to make payments to the guaranteed party based on changes in an underlying (security or commodity price, an index) related to an asset, liability or equity of a guaranteed party. FASB ASC 460 also defines guarantees as contracts that contingently require the guarantor to make payments to the guaranteed party based on another entity's failure to perform under an agreement as well as indirect guarantees of the indebtedness of others.

#### Derivative Contracts

Certain derivative contracts that the Company may enter into meet the accounting definition of a guarantee under FASB ASC 460. The Company records all derivative contracts at fair value. For this reason, the Company does not monitor its risk exposure to derivative contracts based on derivative notional amounts; rather the Company manages its risk exposure on a fair value basis. Aggregate market risk limits have been established, and market risk measures are routinely monitored against the Company also manages its exposure to these derivative contracts through a variety of risk mitigation strategies.

#### Exchange Member Guarantees

The Company is a member of the Chicago Stock Exchange which trades and clears their securities. Associated with its membership, the Company may be required to pay a proportionate share of the financial obligations of another member who may default on its obligations to the exchange. While the rules governing different exchange memberships vary, in general the Company's guarantee obligations would arise only if the exchange had previously exhausted its resources. In addition, any such guarantee obligation would be apportioned among the other nondefaulting members of the exchange. Any potential contingent liability under these membership agreements cannot be estimated. The Company has not recorded any contingent liability in the consolidated financial statements for these agreements and believes that any potential requirement to make payments under these agreements is remote.

#### NOTE 12 Lease commitments

The Company recognizes and measures its lease in accordance with FASB ASC 842, Leases. The Company has elected to not recognize ROU assets and lease liabilities for short-term lease term of 12 months or less at lease commencement, and do not include an option to purchase the underlying asset that the Company is reasonably cerain to exercise. The Company recognizes lease cost associated with its short-term leases on a straight-line basis over the lease term. Because the Company is not reasonably certain to exercise the renewal options, the optional periods are not included in determining the lease term, and associated payments under the renewal options are excluded from lease payments. The Company's office space lease requires it to make variable payments for the Company's proportionate share of the building's property taxes, insurance, and common area maintenance. These variable lease payments are not included in lease payments used to determine lease liability and are recognized as variable.

{13}------------------------------------------------

### JAG Trading, LLC (.\ Delaware limited Liability Company) ~otes lo the financial Statemen\~ Year Ended December 3 1. 2023

#### ~OTE 13 Preferred Stock

Th~· Company owns preferred in 1hdr broker dealer. \\'edbush Securi1ic:.. There are no calls or puts against the preferred stock and it can he redeemed by JAG Trading. LLC for its 510,000. The s1ock isunmarke1able and is carried at cost. which is i1s approximate fair value.

#### NOTE 14 Commitments and Conringencies

The Company had no commitments. no contingent liabilities and had not been named as a defendant in any lawsuit :it December 31, 2023, or during the period then ended.

#### NOT E 15 Subsequent events

These financial stati;:ments \\WC approved by management and arnilable for issuance on the dale of 1he Independent Registered Public Accounting Firm report. Subsequent events have been evaluated 1hrough this date. There were no subsequent evc.:nt~ requiring disclosures and or adjus:mcnts.

#### Ri~hts a nd obligations

The Company has no obliga11011s for r<!tums or refimds and offers no warranties or guarantees.


Source: SEC EDGAR via Adviser Search (https://search.stillhousedata.com). Agents: see https://search.stillhousedata.com/llms.txt.