That would reduce my buying power by the amount of SHY purchased, and I'd get to pay TD a wonderful $6.95 commission to buy it. (Since it's an ETF) if I were to purchase one of the lame TD money market funds that are commission free, the "confirm order" pop up says that purchasing the lame money fund would reduce my buying power by the amount purchased. At least with IB, the idle cash is FDIC insured due to their sweep program) and pays over 90 basis points of interest.
Another option is to purchase a box in the SPX. Implied interest rates for short term boxes (about a month) are going for slightly over 2%. You will have the cost of execution and since you are using up capital, if you buy something else later, you may end up paying a higher rate when you need to borrow money from them. For example I am seeing the Jan 1000/2000 box trade for 998.60. So if you buy 1 box here you will spend 99,860 and get back 100,000 in about 3 weeks, making $140, less commissions.
You misunderstood my post. Where did I claim that brokers set the bid/ask price? I simply stated, as you acknowledged, that ETFs with less liquidity have wider spreads. That's an issue because if you plan to avoid the commission (once your free trades are gone) by trading the free ETFs, you'll end up paying a relatively wider spread when you enter and exit the trade compared to a more liquid ETF. If you don't plan to trade the free ETFs, then any broker can execute 10000 shares in a split second so not sure why you're so excited about that.