ETF Symbol BOXX on the OCC Calculator was not present so I was unable to check the requirement. I can tell you it is not cash and will not be treated that way.
Does BOXX etf always rise at 5.5%'ish per annum? https://markets.ft.com/data/etfs/tearsheet/summary?s=BOXX:BTQ:USD
So can you suggest what kind of security I can buy that can earn interest and I can use that for options buying power so I can also trade without paying any margin interest even if I hold that short option position for like a week. I spoke with Schwab rep. and he said t-bills are not cash and you can not get option BP so if u hold the short option position overnight u will pay margin interest... I am like what is the point ? I will end up paying more on your margin interest than I might earn on t-bills
I spoke with Schwab rep. and he said t-bills are not cash and you can not get option BP so if u hold the short option position overnight u will pay margin interest... I am like what is the point ? I will end up paying more on your margin interest than I might earn on t-bills
It makes a difference how much money we are talking about. $30,000 account vs $3mm. I'm not asking you for the size of your account, but you have to consider how important this is to you. In an equity margin account, we hold back 10% for T-bills. In a simple example, if your account has $125,000 in CASH and you buy about $100,000 in T-bills (value, not at maturity), your account will have $25,000 in CASH and an excess of $90,000 from the T-bill. That excess is a total of $115,000 that we would use to provide buying power based on the leverage assigned. Since options are not marginable, you would have about $115,000 to buy options.
Buy SWVXX if below $1M, SNAXX if you have more than $1M. Today, SWVXX pays 4.68% and SNAXX pays 4.83%. I think they both compound monthly.
Thank you for the info. I have a question: If you have cash in your account, does it mean you don't pay margin interest?