SGOV
iShares® 0-3 Month Treasury Bond ETF
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Automated investing for retirement accounts (fidelity/schwab) vs picking your own distributions. The good vs the bad. Discuss
Why is everyone so down? Based off these subs, everyone is investing, sooooo
Is there a downside of using CSPs to acquire ETFs I want to hold long term?
Taking gains on a some highly profitable Space stocks
Direct indexing after large capital gain of near 600K
DIY direct indexing for Large capital gains ($450k+)
How do you prioritize contributions to taxable brokerage account vs maxing tax deferred accounts?
Where should I park emergency saving HYSA or SGOV
The mental drag of holding 30% cash right now is getting brutal
Robinhood- looking for best Cash alternative for high tax bracket + high state taxes
Do you expect the PDT rule change to impact you that much?
Is there an app that actually lets you sort symbols in a list by 30-Day SEC Yield?
An exception to ‘Time in the Market beats Timing the Market’
Unsure how to balance risk after maxing retirement accounts
Buy SGOV at end of month and sell it at beginning of next month to collect state tax-exempt interests from capital lose, is that practical?
Can someone help me understand what the hell I’m doing with my cash
Need to move 400k in a high fee 401k to new brokerage account
TQQQ and Gold Strategy using the SPY 200SMA (Three Phase Strategy)
Best options to park cash on High Yield Stable Funds in RH Retirement Accounts
Cash for house down payment: Sell SGOV vs Margin Loan?
The Porcelain Bull: A 35 Indicator Framework for 2026 Correction Probability
The Porcelain Bull: I Built a 35 Indicator Framework and Went 57% Defensive for 2026
Looking to get a second opinion on my investing plan
Using box spreads + SGOV for very low interest rate loans
SGOV's share price changes and can drop. Can I lose money on it?
You guys that crap on good advice and then delete suck
What time does SGOV typically pay out its dividend? Its due today and almost the days end
What is your guess of what SGOV will return in 2026? And is this dictated by the Fed decision or also the changing yield curve?
Can a fully cash secured account of margin account lvl 3 be margin called ?
Backtests of Selling Cash Secured Puts vs. Buy and Hold?
Parking money I will need in the short term- NY Muni (VNYTX) vs US Treasury (SGOV)?
Using Treasury ETFs Within Taxable as an "Envelope" System?
Currently have my e-fund in SGOV, does it make sense to sell after December's 2nd Ex-Dividend date?
What is a good stock or ETF to put money in when the market is in a correction or just going down?
looking for assets that will grind higher regardless of market conditions
Bond fund / ETF with better yield than SGOV and super low risk ?
What to do with 110k crypto proceeds? Stock market (I don’t think so)
Do I buy bonds if I think there is going to be a recession?
Attempt at almost all weather portfolio (with ~10% leverage)
First time investing, looking to make sure im not making any obvious mistakes.
Mentions
I'd just throw it into SGOV. At least then you're making money while the money sits.
Does everyone just go all in on everything or do some of you take little micro bites and profits? Today for example I traded $3000 to make $350 within the first 30 market minutes, leaving $130,000 in SGOV. It is probably all I will do today, staying all cash (well, SGOV) for the weekend. It seems...boring.
Fuck me I used to own DELL at $68 avg. But im an idiot so I sold at 100% profit to buy SGOV. Around 500 shares
SPMO and SPHQ. I hope by “cash” you mean T-bills or SGOV.
https://preview.redd.it/zh6w200zjy3h1.png?width=212&format=png&auto=webp&s=5553134e4b9ebeeb5c25c8aadbb9016196ee45dc Wen rug pull? Most of this shit is in index funds, the gambling port is a rounding error and barely above SGOV - so when to exit the index funds and full port SGOV?
I’m nearly 60% SGOV and feel like such a pussy LMAO
SPMO, QQQM, SPHQ, XLV, XLU, XLP, SGOV, depending on you view of how the upcoming IPOs will affect the market. Ordered from bullish to bearish, but all 7 have positive expected returns.
I wanted my money to be super safe so I split it between SGOV and BIL. Never have all your eggs in one basket
I’ve been sitting on a small BRK position for over a year but it hasn’t come close to matching even SGOV so I’m concerned it’s turned into a post-crash recovery play and isn’t really analogous to cash right now.
I think this makes sense, Bonds only lose money over time while at least with SGOV you dont.
At 35, I would say $70k in SGOV + 6 months of expenses is probably just about right amount of cash, probably a little more than you need. I mean you have to think of what your worst case sceanrio is and have the liquidity for that. You say stable, but $100,000 - $150,000 is a huge range, lol. I'm not familiar with "intelligent portfolio" or "go," i'm just gonna assume they buy individual equities. If you came to me and said you wanted to maintain your cash-equivalent positions as is and put all your retirement account money into VT and/or VOO or split it between them in some fashion, I wouldn't have a bad word to say about it. If you think your don't need 18 months (or how ever much $70k + 6 months adds up to) of expenses, then shave that cash position down a little and put it in VOO/VT or even take a couple small positions that you decide on yourself, to keep things interesting. Not meme shit, real shit.
87.5k in SGOV here ….
I would not purchase SGOV or bonds until you are closer to retirement age. The classic Boglehead strategy is “your age in bonds” (i.e. 40 years old, 40% in bonds), but I think most at this point would say that’s too conservative. A more modern approach is age minus 10 or 20. I am 40 years old and I’m 100% stock indexes. I do not plan to move to bonds until I am 5-7 years from retirement. That might be too aggressive for some.
Started with Etrade and have been gradually shuffling to Hood, but am keeping Etrade active since Hood doesn't let you trade individual bonds. I've decided to cut out the middleman begin building a ladder rather than using SGOV or other ETFs priced off rates.
Ultra short term treasuries are protected from the volatility, SGOV
The only way this would be somewhat risk free is if you put it all into treasuries or similar like SGOV. You’d make more than 2.7 but would also have to account for taxes. A few states are state tax free on treasury bonds or equivalent like SGOV so you’d have to do the math on whether it would make sense. TBH the returns after taxes are probably negligible and not worth the hassle.
Definitely take it 100% if you can afford the payments out of pocket TLT gives good yield SGOV is like at 4.5% and shit like coke n Pfizer is like that 10%
VBIL. It is functionally equivalent to SGOV. They are both 0-3 month Treasury bond funds. The share price is different. The yields are the same within a couple of bps. Another option is one of the Schwab money market funds.
I’m a cautious bear and I have moved to about 90% SGOV. I am still actively buying IBM tho, their quantum team and expectations are stellar and the government just announced a billion dollar investment. Quantum is going to be a game changer in every sense of the word. Plus we have two events happening this year that historically have engaged corrections and that’s the changing of a fed chair when inflation is on the rise and midterm elections. I could be wrong but historically since the late 1800s, both of these events have correlated with market corrections.
My SGOV position dwindles as a percentage of my IRA as SPMO, QQQ, and VONG fight to take the whole thing over on the way up.
SGOV and chill. That’s a cool $15B at practically no risk
People say “cash” like it’s just sitting there doing nothing. They put their cash directly in treasuries. I guarantee the money is at least generating the SGOV returns of 3.55% for the last 7 days (annualized, of course). That means that their “cash” is still generating about $271 million every week, which is over $14 Billion a year.
The logic is sound and this is actually one of the cleanest applications of CSPs — you genuinely want the shares, you have a defined cost basis target, and SGOV covers you while you wait. The math works. The one thing you're partially missing: your 16.5% annualized assumes continuous assignment avoidance and redeployment at similar premium levels. In practice VTI's IV compresses during bull runs — the same $355 strike might only pay $1.50 in 3 months if volatility drops, which changes your annualized yield significantly. The other consideration is the California tax treatment on options premium. Short-term gains on collected premium are taxed as ordinary income in CA, not at the LTCG rate. Your 35% reserve for taxes on the underlying may need to be higher on the premium portion depending on your bracket. The scenario where this hurts most is a slow grind up in VTI — you keep collecting 1% monthly while VTI appreciates 2-3% monthly, and you never get assigned but also never participate in the gains. The opportunity cost compounds quietly. Otherwise this is a well-reasoned strategy for your specific situation. The fact that assignment is genuinely acceptable to you is the key variable that makes it work.
Emergency funds first. You can put it into Treasury ETFs (SGOV or VBIL) or Treasury money market funds (FZFXX). Something always happens and it is nice to have that buffer zone, so you don't have to sell your investments.
Smart guy here. This fresh ATH was pretty much expected, since literally is the unique time it can grow market before macro quickly sharps down. Also is typical of any blow off top in a bubble. That's why I was all in spx calls, sold them day before Nvidia earnings, and bought later with 20% discount and sold them at Friday at +27%. Now honestly I am just waiting to go half in puts by late June. But for average stock trader I would suggest you go to SGOV for quick 1.2% in 3 months and then buy the dip will happend relentless in mid term year, specially after incoming 🥭 July announcement
> The issue is, I think even 2 years to expire leap puts are very soon to make any call. So I will wait it out longer before deciding if I take any short position on these Yea, 2 years should probably work, but I'd just sell 1 year calls on the bubble stocks after spacex ipo if I were gonna go this way. A lot of choppiness over the top period for 2000's bubble stocks like orcl and csco, will be rough holding a 2 year for that first year if that chop is repeated (I'd wager it will) thanks btw, i think a lot of these points address what I was trying to figure out > Keeping more than regular amount of cash in highest interest possible saving accounts ya, this makes sense, I just hold SGOV since my bank doesn't do much, and its convenient > Keep buying MSCI and S&P 500 ETFs are you referring to msci world etf URTH? wouldn't the world meltdown more than s&p given how much US is f'ing with energy supplies for everyone?
Honestly the market is full of opportunities right now. Im super bullish on oil, BNO for easy exposure. AAL puts are super cheap if you want a proxy, bought 60DTE 15puts for 1.75, with the stock trading at 13.90ish. Lots of software is beaten down to the point of being excellent value picks. ADBE, WDAY are two of my favourites. Accenture is also beaten down, but I have not yet decided if its a good pick. Might be worth a look, though. Some safe things Im liking right now are: RSG, WM, VIE (french), EOAN (german). They are all providing services to municipalties, etc. RSG and WM and waste management, VIE is more water focused, EON is energy. Good dividends, solid growth. Boring but good value picks. I dont mid SGOV either, with rate hikes on the horizon and inflation rising steeply.
I’ve been scheming up a play around the idea that semis will see a large rotation out / underperforming sectors will see a large rotation in for quarterly rebalancing throughout second half of June. I’ve been slowly increasing my positions in XLV, XLU, XLI, and XLP by selling my SGOV
For something that resembles both monthly returns and don some steady growth. I’d say half into SGOV for “risk free” short term monthly cash and other half into SCHD for some slight steady growth with risk where you still get dividends. 1. You won’t capture the same growth as other ETFs/funds when market rise. But definitely less risky when it drops 2. Monthly income from both, and hopefully SCHD grows alongside which equals to higher and higher dividend income going forward
Sorry forgot to warn you all to buy BIL or SGOV to get some interest over this holiday weekend. My bad!
VBIL is a better alternative, it's 100% exempt and it has a slightly lower expense ratio. Pretty much same percentage as SGOV also.
[https://www.ishares.com/us/literature/tax-information/2025-ishares-us-government-source-income-information-stamped.pdf](https://www.ishares.com/us/literature/tax-information/2025-ishares-us-government-source-income-information-stamped.pdf) SGOV\*\* iShares 0-3 Month Treasury Bond ETF 95.14% Learn taxes bro.
96% 😆 wtf. It's 100% exempt from state taxes. All Federal bonds and SGOV is considered one.
I'd have to double check, but SGOV last year was 96% exempt from state taxes. I use it to store extra cash.
You can get around 4% in SGOV and it's comically liquid. Iirc you don't pay state income taxes on the dividends but I could be wrong there. If you were in straight treasuries you definitely don't have to pay state income tax on those gains.
yeah, we’re SGOV for the weekend
You already won. Don't risk pants down in the coming bubble burst. Put 5% trailing stops on everything and as they sell off put it into VT, or VTI+AVGV+(SCHD/SGOV) depending on risk tolerance. Delete the app and only reinstall it once a month to make those trades. I mean full port Tractor Supply calls or whatever.
if the goal is capital preservation with better yield, SGOV or a short-duration treasury fund is the right answer, not equities. VTI solves a different problem where you are willing to see the value drop 30% temporarily. clarify the horizon first. if this money might be needed in 2-3 years, stay in something treasury-like
I do SGOV for this. Tax efficient too
The point is, you CAN guarantee $30k a month with longer term bonds. If that is what you are trying to do, SGOV is not the right choice.
BTW, there are a basket of items that can be considered cash... like SGOV or various cash-like funds where the principal is never lost. Also laddering in CD's as appropriate, based on expected direction of interest rates. The main thing is that if you need the money in a week, or if you lose your job, you aren't also facing a significant principal loss that compounds the stress.
$10 million into SGOV would be a guaranteed 300-400k/yr. or a cool ~30k/month
SPMO, SPHQ, QQQM, VONG, AVUV, AVDV. Switch to margin account. Use a small amount of margin to sell puts on the above during dips to increase exposure. Small amount….always assume you’ll get assigned when you sell puts. Don’t try to make a living off them. Treat them like limit buy orders. One short put on each of those is like $90k worth of margin if assigned. Buy T-bills via SGOV with the premiums and liquidate them if assigned to reduce interest.
is SGOV truly 100% risk free? i feel like i get how it works but i also dont.
My options trading relies on liquidity, so I view the tax drag on having some of it in SGOV as a necessary cost to maintain that flexibility. I prioritize having flexibility over micro-optimizing tax efficiency, which keeps my options open and also protects me against IRS rulings against BOXX.
This. I have Fidelity and Schwab but my Fidelity collects dust because I hate how deposits work. The #1 factor I like Schwab was because of deposits AND it has Zelle. For international travel, I use the Schwab card. I can just Zelle money between my Capital One, BOFA, and Schwab accounts when needed. With the inclusion of fractional ETFs, Schwab is better than most competition imo. I have no use for auto-sweep since I prefer tax-advantaged MMFs and bond ETFs like SGOV anyway; I do agree it'd be convenient though.
Selling 0DTE PUTS on SGOV. Whats up?
I follow a similar strategy. I keep most of my cash margin in BOXX, but I hold some SGOV for liquidity. This way, I avoid triggering long term capital gains when I need cash.
i’m similar tho i just keep cash in SGOV/JAAA/PAAA
\> 20 percent backing on 125 percent notional is roughly 25k of non interest cash Yes, but then you end up with the brokerage requirement to be 125% of the overnight rate, so you end up at 25% backing, plus you need a bit of a buffer to handle debits on down days. Here's my spreadsheet math. It's showing me 350 bps above the risk-free-rate. I get closer to the 100 bps you mentioned when I set the buying power requirement to 20% instead of 25% (I wasn't expecting this to copy-paste perfectly) |Risk Free Rate (RFR)|4.00%| |:-|:-| |Expected Dividends (DIV)|1.30%| |Account Equity|$100,000| |Target SPX Exposure|125%| |Notional Exposure (NotExp)|$125,000| |Cost of futures = *(RFR - DIV) \* NotExp*|\-$3,375| |Buying Power Requirement = *1.25 \* NotExp \* 0.2*|$31,250| |SGOV Total = *AcctEq - BuyPow*|$68,750| |SGOV Interest = *RFR \* SGOVTot*|$2,750| |Dead Cash Lost Interest = *RFR \* BuyPow*|\-$1,250| |Total Cost|\-$1,875| |Cost of Leverage = *TotalCost / (NotExp - AcctEq)*|\-7.50%|
I have 85k on SGOV ( my HYSA )— but we are moving in about 11 months so that is my reasoning
Same. Plus, it serves as a convenient vehicle if you want to pivot out into another investment opportunity (rotating in/out of SGOV into VOO or something). Reduces friction a little bit.
I'm shoveling $50 into VOO and $50 in SGOV every weekday. I'm finally up $100 over the past year lol. $19,900 more to go...
Yeah, VOO and chill from here on out I guess. I got 10k parked in VOO and 10k in SGOV for emergencies. Adding $50 to each one every weekday. Hoping for the best.
Hi RareRanger, moved my EUR into ERNX by today. Don‘t sit on USD as all is invested. Emotionally EUR is my home currency, but I ignore the EUR/USD changes since I buy directly in the US. Kind of a solit of risk. Only the JPY is the big sucker. Will still move it into USD step by step. Had a look at SGOV and indeed looks interesting. With a part possibly in HYG, but that needs further study.
ERNX is a solid move for your EUR portion because it’s ultra-short duration, your interest rate risk is incredibly low and it definitely beats letting it rot in a standard European bank account. If you want to optimize the rest of your cash while keeping that "dry powder" ready to deploy instantly, I'd look into US Treasury Money Market Funds or short-term T-bill ETFs like SGOV for your USD, and an overnight cash ETF like CSH2 for your GBP. They essentially pay the risk-free rate with virtually zero credit risk compared to corporate bonds, keeping you completely decoupled from market swings. Just keep an eye on that FX layer since your income is in JPY; exchange rate fluctuations can easily wipe out a few percent of yield if you're holding cash in the wrong currency while waiting for an entry point. Keeping 25-30% on the sidelines isn't a mistake if you're hunting for specific opportunities, and ultra-short ETFs or MMFs are exactly how you stop inflation from eating it in the meantime.
It's to your comfort level. However don't keep significant amounts in HYSA, SGOV is virtually as reliable, will likely have a higher yield, and all the states 8 know of exclude it from taxable income (federal still applies).
A lot depends on your age and where you are in life. If you’re younger, I’d invest more in the market (VTI and such) and just let it ride. Time is your friend. If you may need the money sooner for whatever reason, I’d keep whatever I need soon in HYSA or SGOV. I’m in my 40s and I am 70% in the market. My wife and I both work and we make enough to live off one of our incomes if needed. I have hedges with bitcoin and gold and we own a rental property in addition to our house, so it feels pretty secure. Do some more self evaluation and you’ll probably get a good idea of what balance to have.
SGOV gives 4.3% right now and it’s risk free so maybe look into that or BOXX. How much do you get for your HYSA? Maybe look into higher yield ones, there are some with 5-6% out there and at this high an amount you might as well shop around.
I personally keep 12-18 months parked in SGOV. Really depends on your own personal situation and job sector. For example I’m in biotech and this shit is unpredictable as hell
SGOV was made for that, similar annual yeild as a CD, liquid like an etf.
Why is the SGOV rate wild right now? Google says 3.54%
Put it in SGOV. The rate is wild right now, if not, Sofi has a 4.5% checkings account.
I like SGOV, but the state tax rate in Georgia is so low it is hardly felt. I think 5% if I am not mistaken (too lazy to look it up). SPAXX is fine for now. Worst case scenario the OP can always switch to SGOV or VBIL later.
If I do end up investing in VOO would it be ideal to put 25 percent for two years then about 10 for the third year and the fourth take everything out of VOO and go all in on saving, or is the risk just not worth it for how much VOO would prob lose or gain in those 3 years I do think SGOV would be a better option as I feel like it would make me more disciplined and less likely to pull the money out or invest in a useless stock
Your first plan is better than the second lol. Individual stocks have huge risks compared to a broad market fund like VOO, which already has a risk compared to a money market fund. Any money you will NEED to have within a few years should not be put into stocks. I would do something like a treasury fund such as SGOV over a money market fund, but the idea is the same. You want to avoid stocks for exactly the reason you mentioned.
Baxx, I consider similar every day. Could just live on SGOV or some divided ETF
I know of SGOV for short term but TLT dropped today for some reason lol
I built my first little bond ladder for 9 months out. So I'm shuffling money between the accounts and liquidating SGOV to match
Interesting. You criticize on one hand; “ Is it because most of you guys went to cash during tariff's 13 months ago?”, while on the other hand; “ Today I trimmed 20% to SGOV for my guaranteed retirement money.” So your point is that your market timing is better than everyone else’s? Or is it that your risk management should be universally applied?
Watch Ovtlyr on YouTube, get Think or swim. Paper trade 3-6 months and jump on in. You will learn to make a plan for yourself that you can live with. You get excel sheets to track your trades already set up for options. I’m still learning and getting started myself and honestly right now is a time to sit in cash and don’t fu! I don’t trade puts risk to reward is skewed. I’m in SGOV earning 4% until the market changes.
Dumb question, but how does the 10yr rising affect SGOV yield?
I get the fuss! I think those skeptical about Hood have legit reasons to do so. Find a middle ground that works for you! I did. I have my Roth in there, crypto, and hedge investments. (SGOV with margin, BRKB and WM) But keep a sizable investment account with Vanguard!
Between my pointer finger and thumb. I put swept cash in both Spaxx and SGOV (longer term)
I’m retired and do the opposite. I sell appreciated assets in brokerage acct and buy SWVXX (or SGOV) in brokerage accounts several times a year - when market is up. (I’ll do from Roth IRAs if capital gains are at target and I want to hold off increasing that tax burden.) And sell some SWVXX / SGOV in brokerage and move cash into checking when I pay bills to generously cover for at least a few months. Having all the accts at Schwab makes it super easy to perform these transactions. So far so good! But I’m only retired couple years. So far my gross invested assets have grown - growth outpacing spending. I know that’s not going to continue indefinitely, but I’ll be happy for it to continue a while longer. When the time comes and I’m digging deeper into assets, I’ll remember these years when the market was rocking. I figure it’ll all even out and I’m prepared for that.
I keep most of my cash in FDLXX for the tax savings but the expense ratio makes me wonder if I might be better off in SGOV or similar.
I take my cash and put it in SGOV. It’s a short term bond ETF that pays monthly dividends. It’s very liquid. Or I will place a put credit spread on XSP. No longer then 7 days to expiration. It’s a $100 bet that the market will stay relatively flat that week or it will go up. That brings in roughly $15-25 a week with a roughly 75% win rate
SGOV. I call it my SGOV buffer. Basically just 4% T-Bills that matter very little when you enter or liquidate.
Agreed. I’ve been dumping my savings into SGOV for now, and the tax free state situation is a nice bonus.
I recently implemented a 3-tier cash strategy: -Tier 1 - Fidelity CMA in SPAXX at about 3.3% (functions like a checking account). - Tier 2 - HYSA at OpenBank earning 4.0%. Funds (up to $5,000 daily EFT limit) available in 24 hours. - Tier 3 - Fidelity CMA invested in cash-like high-dividend positions - 10% each of SGOV, CSHI, SCHD, GPIQ, and GPIX. Currently returning about 6.04%. Dividends on all these positions are somehow tax-advantaged. No state tax on SGOV or CSHI, qualified dividends on SCHD, and mostly tax-deferred ROC on GPIQ and GPIX. If interest rates drop I may shift more cash further up the tiers to earn more interest unless I need the cash soon for a specific reason. I’m 5-10 years out from retirement, so trying to build my cash pile/buffer to protect portfolio in down years.
One covered call on NWL. Shuffling money between accounts. And clenching. I'm planning to cut out SGOV, TLT and other bond ETFs ETFs soon (except for some option plays) and just start building a gradual bond ladder. I also see RNMBY under 300 again. I'm going to see if the knife stops falling and reload some shares.
TIL you can buy puts and calls on SGOV
Likely better to evaluate after tax yields of other similarly stable assets. SGOV or municipal bonds come to mind for the US. Depending on your state of residence there may be specific assets even better for after tax yield.
My math says that $12k would be earning about $39 in SGOV over the same time period. So $100 - $150 is a win.
Everyone’s situation is different. I’m in CA and am employed since Dec 2025. Spouse is still working and I keep around 150k in SGOV incase something happens. It’s expensive here so I need about 7k month just to pay all my bills.
Berkshire is hoarding all this cash for what? The only purpose I see for holding Berkshire is as a hedge against a crash when they would theoretically buy the dip. But I could just put it in SGOV instead of Berkshire and be in control of what I buy if a crash happens…
Your logic is solid but there's one hidden cost: opportunity cost in a ripping market. If VTI runs from $363 to $400 while you're collecting $3.80/mo in premium, you missed $37 of upside for $3.80. The CSP only wins in flat or mildly down markets. In a strong bull, just buying the shares outright is better. That said, parking the cash in SGOV while waiting for assignment is smart — at least you're not losing to inflation.
The math on the returns is reasonable on paper, but there are a few things that make the actual outcome more nuanced: \*\*The 12% is a volatility snapshot.\*\* You're pricing CSPs at current implied vol. If vol contracts (which it tends to do after a spike), your premium income drops — you end up rolling down in strike or extending DTE to get similar credit. The backtested 12% assumes you can repeatedly sell at this vol level, which isn't realistic over a full market cycle. \*\*Dividend-adjusted assignment cost.\*\* You mentioned VTI pays \~1.3% in dividends. While you're holding CSPs, you're earning \~4.3% in SGOV, plus \~0.25-0.35% per month in option premium. But you're giving up the VTI dividend yield during those weeks — and those dividends compound over time. The true comparison is: SGOV + premium vs VTI shares + dividends + appreciation. If VTI rallies during your CSP window, the gap widens. \*\*One thing that might fit this strategy better — structured notes.\*\* There are autocallable structured notes linked to the S&P 500 or Nasdaq that behave like selling put spreads (you get a fixed coupon as long as the index stays above a barrier, typically 50-70%), but with a defined maturity and no active management required. They don't have early assignment risk or volatility decay the way short options do. The trade-off is less liquidity — you hold to maturity or pay a bid/ask spread to exit early. Either way, the core of your approach (use a yield-generating vehicle while waiting to deploy cash) is sound. The main risk is the same one others have flagged — VTI runs away from you while you're collecting pennies in premium.
Assume everything you put in from now on will be cut in half before you make it back 10 years later. If you are okay with that, keep putting money in. If you need that money in 5 to 10 years, thinking about other things like short term treasuries (SGOV).
The cleanest way to evaluate this is on a tax adjusted comparison basis rather than gross premium yield. Premium collected on CSPs is short term ordinary income, so at your 35 percent federal plus 10.3 percent CA marginal it lands at roughly 45 percent effective. The 3.80 premium becomes 2.09 net. SGOV dividends are exempt from CA state tax but federal taxed as ordinary, so the 3.91 percent SGOV yield becomes roughly 2.54 percent net. Combined the strategy nets roughly 9.2 percent on the capital tied up in the put. Buy and hold VTI is qualified dividend on the 1.04 percent yield (roughly 0.75 percent after tax) plus deferred LTCG on appreciation. VTI 5y total return is about 14 percent annualized. After tax buy and hold is roughly 11.2 percent on the actual deployed capital. So the CSP strategy underperforms buy and hold by about 200 bps after tax in a flat to up market. The case where CSP wins is the flat to down scenario where VTI ends the cycle at or below your strike. At that point you get the premium and the lower entry. The case where CSP loses is the up scenario where you collect 209 per contract while VTI runs 20 plus per share past your strike and you miss the 2000 per contract appreciation. Across reasonable forward distributions for VTI, the math favors lump sum buy in as the others have said. If the question is is there a tweak that makes CSP work, the answer is to sell wider OTM at lower delta (15 to 20) which reduces the miss the rally risk, accepts lower premium, but functions more like a buy on dip discipline. The 25 to 30 delta strike you are quoting is too close to acquire reliably and too far to compete with direct purchase.
The piece worth pulling apart is the actual return on risk capital. SPX 6/18 5920 strike right now is roughly 5 mid, so 500 dollars credit per contract. Reg T margin sits around 20k+ per contract because notional is near 590k, so true monthly yield is something like 2 to 3 percent before any breach, which is fine but not the free money the framing suggests. The deeper issue is you do not need a 20 percent move to lose. A 6 to 8 percent drawdown with a typical vix spike from 14 to 28 expands the put price by 4x or more even with the strike still untouched. The roll at 1 week left either eats that vega hit at the worst moment or rolls into a credit that no longer reflects favorable risk reward. The rare drop framing focuses on the strike breach which is the wrong KO. Sizing is the only real lever here. At 5 percent of NAV per cycle it is a yield enhancement on the SGOV equivalent cash that backs the position. At 30 percent it is the credit trading equivalent of writing insurance you cannot pay claims on. The upthread point about waiting for an iv regime above 20 before deploying is the right frame, but it also means this is not a consistent monthly income strategy, it is an opportunistic vol selling strategy that sits idle most of the year.
They need to max leverage SGOV and buy GLD IBIT and TECL for the loooorrreeee
It's not about whether or not you can hold for LTCG, it's about whether or not the proceeds from this strategy pay enough to make up for the ordinary income taxes you'd be realizing. At 35% federal tax rates and 10.3% state tax, your proposed strategy is effectively \~9.16% return, since you have to pay taxes on all the income (except no state tax on SGOV dividends). VTI's total returns by market price over the past 14 years (since 2012—excluding the tail end of the great recession) has averaged \~15.46% per year, or \~10% yield after LTCG, so buy-and-hold would come out ahead when it's time to sell. And if you sell in retirement when you're no longer hit with the higher 20% LTCG + 3.8% NIIT, buy-and-hold comes out even better. You could even pay 0% tax on VTI depending on how much you realize in capital gains. Your state taxes will be lower too. If your plan is to diversify into VTI for retirement you should probably just do that, not pay taxes on premiums while watching it slip away.
Added an edit... This isn't an income strategy--any returns from either options premium or SGOV dividends will be reinvested, minus taxes of course. The hope is that this buys me more fresh powder to deploy.