Park spare cash in IB account

Discussion in 'Trading' started by sheepsucker, Jun 19, 2012.

  1. Hi!

    What is the best place to park spare-cash in IB account?

    Preferrably it would be a bit short EUR and long Asian economies, but most importantly safe and generating something other than interest accruals.

    Base currency is EUR at the moment.
  2. SPY, GLD and BND or some combination thereof

    I ain't trying to make money, I'm just trying to hang on to what I got

    There is no such thing as cash anymore

    You are always long or short something
  3. TBT is good. Short bonds bubble.
  4. but aint that the truth? You gotta take a position somewhere just to stay even. Even if it is only 10% of your cash. The days of parking are over.
  5. You can put your idle cash to work by selling EFPs (Exchange Future for Physical). You would be 'opening' on both legs of the transaction by buying the underlying stock and selling the appropriate number of Single Stock Futures. The combined position will have zero delta exposure to the movement of the underlying and the premium in the SSF will decay as expiry approaches in the form of yield into your account. At expiry the long stock is used to deliver the short SSF obligation and the position becomes flat.

    Transaction costs are critical so they must be low to take advantage of these situations. A list of EFPs that are available for hit/lift can be found here:

  6. No kidding, there is probably a very good market for cash management. "I just want to park it, but everywhere I park it I get a negative return."
  7. Sorry, I have to speak up. Putting your money in SPY, BND or GLD is not "parking cash," it's investing.
  8. it's investing if you make money, if you just break even or even lose a little it's the same as being in cash
  9. As a follow up to my last post:

    I failed to mention that OneChicago has a more institutionally oriented match engine for blocks and EFPs call BETS. (Block and EFP Trading System) Certain brokers allow orders to be routed to BETS directly which will display the order to a wide array of Delta One desks that can then Hit/Lift orders. Delta One desks are in the business taking the other side of financing transactions.

    You should check with your broker as to whether they can or cannot route to this deep pool of liquidity.

  10. Can you just walk me through the logistics. Say for this illustration, I wanted to simultaneously long the underlying stock while selling the equivalent SSF.

    ONXX1D 2012-08 OCX.
    BID = 0.0700
    ASK = 0.0860

    I would then take out the above bid price @ .07 by selling or shorting the above EFP to achieve said above strategy? And then as the decay effect kicks in, I end up pocketing this premium?? Thanks in advance.
    #10     Jun 22, 2012