I'm starting this thread to best address the use of idle cash. This doesn't really apply to day traders, but those of us who trade longer term and sit in cash for weeks or months at a time need to put their money to use.
Let's look at some of our options:
Let's look at some of our options:
- Staying in cash at your broker. A few brokers like Interactive Brokers will pay decent interest, but most brokers only pay around 0.05% interest. If your broker does pay good interest simply keeping a cash balance with them may be the best solution for you.
- CDs are another option at some brokers, but that ties your money up so it isn't ideal.
- T-bills are risk free and pay interested, but they can be a hassle to buy and tie your money up so that's not ideal either.
- Cash equivalent ETFs can deliver good interest, but they're not risk free. This is my preferred choice and the option I'll be focusing the most on.
Self-sufficiency is the greatest of all wealth. - Epicurus