Where do you put your "excess reserves"?

Discussion in 'Trading' started by TGregg, Feb 20, 2003.

  1. TGregg


    If one is a successful futures trader trading say 5 contracts at IB with a typical stop of 5 ES points that represents 2% of his trading capital, that means he has roughly 70k, but only needs about 10k for margin requirements. Obviously you don't want to shave that margin requirement as thin as possible, but 70k seems like overkill (unless you really dig that great interest rate from IB).

    My question is, where do you park your under utilized trading capital? I'd like to shy away from stocks, since I'm fearful of undue influence on my day trading. . .
  2. acrary


    T Bills
  3. omcate


    You can put it in a bank or money market fund, which will give you about 1% interest per year. You can put it in CD. The disadvantage of the latter is that your money will be not be available for trading immediately. I heard that E-Trade Bank money market fund offers 2% interest per year. You may like to check them out.

    For me, if I have "excess reserve", I just short some deep out of money put options that will expire in less than four weeks.

    :p :p :p
    :D :D :D
  4. T-Bills, as was said above.

    They can be used as margin money with any FCM or B/D while the interest accrues to you.
  5. nitro


    I always have cash sitting around in case an opportunity like 911 comes again.

    Every six months or so, there seems to be a real opportunity somewhere. The key is to be prepared.

  6. Yes - always keep unspent ammo in the chamber for that special occasion ....
  7. bubba7


    As you make money you will notice how you number of contracts rise. when you get to partial fills, then you need to lay off the excess into other efficient investments.

    Hopefully by the your current metal picture wil dimm into a rationalone. Then you can short trem trade stocks or if you still need the sheilding let a boutique equities firm handle your stcocks ona POA. If you are accepted into the boutique,there you will be making over 60% a year.

    Once you get to a share volume cap, you can go to annuities. the better ones are paying about 17% a year and you can simply ladder these.

    After that be sure you have your downside risk covered with universal equitiy indexed life insurance. the span of the indexing should be at least 50 yearsand look for a high capon upper interest level (11%) is good. This insurance is paying about 8% at present. do two additional things to start it up. do a lump sum of the max for keeping it out of MEC and also keeep the face as low as possible so that the annual payments are on the MEC line. Most insurance sales people have software to do this. The insurance will be free in about 3 years and the breakeven will be 4 years.

    From what you say about your mental problem, you probably do not have a 401 or such. Do not consider getting it because you are going into a league thatdoesn't do stuff in the cheap seats.
  8. seriously?
  9. nitro


    I have thought about Annuities. But you know what? I can return 15% with my eyes closed on my own money.

    Never heard of Universal Indexed Life Insurance!?? What is that?

  10. Seems to me you've been reading too many sales brochures and now can't tell reality from fiction. Most of what you say is 2nd hand bullshit.
    Post some real sources of those returns and I will reconsider my opinion.
    #10     Feb 20, 2003