What is the best way to use idle cash of an active option trader

I would rate Schwab a bit higher as PFOF prioritizes the partner MMer. Result is fills perhaps a second or two slower. These are limit order so no problem.

 

Doesn't work that way.

Take a look at the Balances screen in your Schwab account. I am referring to the regular website at schwab.com--not TOS or any other interface.

Near the bottom of the screen you'll find a section called "Margin Details and Buying Power." And you'll also see an amount labeled "Option Requirement."

In our account right now, the balance subject to margin interest is zero. We have not borrowed any money. We have a positive cash balance.

The cash balance in our account is $14,143.91.

But the option requirement is $54,956.00.

The option requirement represents the sum total of all the margin requirements for our open option positions, which include equity credit spreads, and naked short calls on the VIX.

I rest my case. We are not getting charged interest. We have option margin requirements of over $50K, but the cash balance in our account is only $14K. The margin requirements are satisfied by our equity holdings.

I have not disclosed the value of the account. I'm not going to, and I don't need to. The margin required for our option positions exceeds the amount of cash in our account, and we are not getting charged interest. We do not have an open margin loan. I've proved my point.

 

Yes, I negotiated a lower rate based on volume.

 

I haven't written naked for a while, in fact since about 2015 so I really don't know. I just repeated what they told me.

 

For day trade, scalping to be specific, using market order, would Schwab have an advantage?

 

Not in shares, no advantage.

 

Thanks.

 

So if it is limit order - it does not hurt retailers when using PFOF broker?

 

Excellent example - Thanks for taking time to share this.
If I may assume - cash in your account is options requirement + cash balance ? $54k + $14K?

 

If you're only trading shares then go with a true agency broker. Trading vol at retail then go with a zero-commission/fixed model like tradier, webull, etc.