hi all, as interest rates have been rising, just wanted to find out if there are any futures brokers out there that pay interest on unused daily cash balances? mine currently does not. i could try to ask. but wanted to find out first what is the current situation out there. thank you.
You can request a T-Bill to fund part of the account. Just don’t let your equity drop below the value of the T-Bill or you will start paying interest.
that seems to be a good way to do it. thanks for the idea. i will try to see if that is doable with my broker.
thanks, i saw that when i was googling. seems that you have to be under their IBKR PRO category to earn a decent interest rate. and under PRO stock trades are charged a commission as opposed to free elsewhere.
There's a few close to risk-free ways to capture close to the Fed funds rate even if your broker does not pay interest on idle cash if you have margin account. Involves buying shares of an extremely liquid index like SPY or QQQ, selling a call and buying a put. Should be able to put that trade on for less than the price paid for the shares. What I do with my excess buying power is simply short far OTM calls or call ratios on SPX. Not an arbitrage, but pretty low risk. Think there was a trader named Karen that had a similar strategy. Worked out well for her for a while...
The title of your thread is about "futures brokers". In that case are stock trade commissions not relevant, isn't it?
The bottom line is..."Client accounts are eligible to receive credit interest on long settled cash balances in their securities accounts. So no, you cannot earn interest in cash in your futures account. A futures account is not a securities account. Do they still teach 2nd grade reading comprehension in school these days? Maybe you should call your broker for the finer details. On the telephone. You know, speak to a human fucking being, instead of text text text on your smartphone. If someone spewed a Dewey Decimal at you, you would think you caught AIDS.
When will people learn - "there is no free lunch". For futures accounts, you don't earn interest no the futures side due to regulations but at IBKR we sweep excess funds to the securities account so you can earn interest on your idle cash. (but even for lite, interest is paid on the BM - 1.5% so you earn 0.08% now which is still more than most firms who are not paying anything.) For pro, currently the rate is 1.08%.