SGOV

hgreenblatt

If you want to Buy and Hold then CC work fine. But most of you 100k will be tied up in stocks. If they go up you are a genius , if not ... Csp are the worst. You have to put up the entire price of the stock, some brokers let you earn interest, some do not. My answer is always the same, get a Margin Account (Schwab , Tasty, IB platform not for me) , you are pissing away your leverage in a Cash Account. If you have the money (25k but 60k better) to trade options (90% of those responding only have 10k or less). You must get approved for Selling Options, this can be hard at many brokers. Tasty is the only one that gives it to everyone. If you Sell a Put without being approved, then it is a CSP, and none of this applies. You can Sell Puts , Calls or Both on Amzn, Appl,Googl, Bidu, Nvda, for 2k-4k Buying Power. If you get Assigned take the loss close out the stock and move on, or ROLL Forward in Time for a CREDIT. Also you can BUY SGOV , get 70% Buying Power on that and interest every month. If you can afford to tie up part of that SGOV cash for 3 months at a time you can get over 99% Face with Treasuries. Selling Treasuries before maturity could cost you a "haircut" , Sgov does not suffer from that. Key:: Always keep 100% of the BP as backup for a Down Move, so if the BP is 10k, keep another 10k as backup. Follow Tasty mechanics , Sell at 45dte, close or roll by 21dte, have a profit target in 50% area. Do not Sell 40 Delta Puts... I rarely do over 20delta, 30delta is ok but you will get tested often. How can this be , everybody on Reddit is wheeling! Try these Tasty vids to see what most Reddit users do not know or worse understand. [https://ontt.tv/3jAf4Ba](https://ontt.tv/3jAf4Ba) Buying Power Factors Oct 28, 2020 [https://www.tastylive.com/shows/tasty-extras/episodes/a-refresher-on-bpr-06-29-2020](https://www.tastylive.com/shows/tasty-extras/episodes/a-refresher-on-bpr-06-29-2020) [https://ontt.tv/2CLbOjn](https://ontt.tv/2CLbOjn) What Affects Buying Power? Nov 14, 2019 [https://ontt.tv/JeGVN](https://ontt.tv/JeGVN) Short Puts vs Covered Calls vs Poor Mans Covered Call Jul 9,2024

ronstory

No problem and happy to help others avoid my experiment's "surprise". Plus with the yield curve negative, it's back to SGOV.

Late_Description3001

SGOV is not halal.

qi2016

SGOV to collect monthly dividends.

ServerTechie

You can do better than a flexible account at 3.23%, and besides as the interest rates are continuing to drop. If you have a brokerage account, consider FDLXX or SGOV. They offer better rates than most HYSA and the dividends are tax exempt on a state level. If you want ever higher dividends, ultrashort bond funds like JPST or ICSH are very stable, but they do fluctuate a little and they have no tax exemption. Depending on your risk tolerance you could consider some equity based ETFs, but remember that stocks are not a safe replacement for savings, and ideally you should have 6 months savings with high interest credit paid off before considering investing in a brokerage account.

Agreeable-Progress85

Fidelity let's you open multiple cash management accounts. So I have one that's for "2026 vacation fund" and another that's for general spending, keeping them separate from the long term investment account. Both are earning interest at 3.6%, but could also buy SGOV or whatever in the CMAs if I wanted to make things slightly more complicated to manage.

Actual_Stranger_1766

interesting, thanks so much for this. Will probably go SGOV until VBIL becomes a little more established

hgreenblatt

You are confused. If you are not approved for Selling Options (you do not say). then even though the account is margin selling a Naked Put must be a CSP. If you are approved for Selling Options, then I am pretty sure it will use buying power (about 8k-10k for a 25 delta), but I have heard Fidelity has a way for you to force it to be a Csp. Anyhow you a throwing away your leverage , and interest. Selling using Buying Power is what you should be doing. The t-bills and Sgov pay interest and can be turned into cash pretty much as soon as sold (Schwab, IB, Tasty). t-bills get 98% face BP, Sgov 70% Bp (sometime 75%). There is no risk. Here was my standard reply. My answer is always the same, get a Margin Account (Schwab , Tasty, IB platform not for me) , you are pissing away your leverage in a Cash Account. If you have the money (25k but 60k better) to trade options (90% of those responding only have 10k or less). You must get approved for Selling Options, this can be hard at many brokers. Tasty is the only one that gives it to everyone. If you Sell a Put without being approved, then it is a CSP, and none of this applies. You can Sell Puts , Calls or Both on Amzn, Appl,Googl, Bidu, Nvda, for 2k-4k Buying Power. If you get Assigned take the loss close out the stock and move on, or ROLL Forward in Time for a CREDIT. Also you can BUY SGOV , get 70% Buying Power on that and interest every month. If you can afford to tie up part of that SGOV cash for 3 months at a time you can get over 98% Face with Treasuries. Selling Treasuries before maturity could cost you a "haircut" , Sgov does not suffer from that. Key:: Always keep 100% of the BP as backup for a Down Move, so if the BP is 10k, keep another 10k as backup. Follow Tasty mechanics , Sell at 45dte, close or roll by 21dte, have a profit target in 50% area. Do not Sell 40 Delta Puts... I rarely do over 20delta, 30delta is ok but you will get tested often. How can this be , everybody on Reddit is wheeling! Try these Tasty vids to see what most Reddit users do not know or worse understand. [https://ontt.tv/3jAf4Ba](https://ontt.tv/3jAf4Ba) Buying Power Factors Oct 28, 2020 [https://www.tastylive.com/shows/tasty-extras/episodes/a-refresher-on-bpr-06-29-2020](https://www.tastylive.com/shows/tasty-extras/episodes/a-refresher-on-bpr-06-29-2020) [https://ontt.tv/2CLbOjn](https://ontt.tv/2CLbOjn) What Affects Buying Power? Nov 14, 2019 [https://ontt.tv/JeGVN](https://ontt.tv/JeGVN) Short Puts vs Covered Calls vs Poor Mans Covered Call Jul 9,2024

ronstory

I tried an experiment for the last two months of SGOV vs VBIL. I decide to try VBIL and moved 1/3 of my SGOV holding to VBIL. I have now waited for two complete months of dividends and below is dividend payout summary from my account this month. The first column is dist-yield and the second column is SEC-yield. SGOV 12/1/25 (payout 12/4) 4.15% 3.85% VBIL 12/1/25 (payout 12/3) 2.81% 3.89% Since the dist-yield is what is deposited to my account each month, between the two, I'd prefer SGOV. The surprise is the that SEC-yield is actually higher on VBIL... YMMV.

croissant_and_cafe

21% but that is accounting for the 25% I have had sitting in SGOV type things so about 30% for the actual stocks. I don’t do much swing / day trading. 80% of my portfolio is long term hold. I play with about 20% doing swing trading at dips with leveraged products or momentum stocks.

Umami_Tsunamii

I’d honestly just do a mix of index funds rather than the individual picks. SGOV is a good safe haven for cash.

dankappledrank

https://marketchameleon.com/Overview/SGOV/Dividends/

JimothyLeFleur69420

i need to invest $30k for 6 months, after which i'll need the full $30k back in cash. would buying $30K of SGOV be good? it seems like it would be slightly better returns plus better tax benefits from a HYSA, is that correct?

evertrue13

Might as well keep it in the brokerage settlement fund for a slightly higher return than savings accounts (I have no state tax so it’s easier than SGOV)

wyterk

Selling puts is a bullish strategy. If market tanks you get hit just like buy and hold. What you are looking for is a strategy that makes more than SGOV while minimizing the risks. Those low drawdown strategies that perform better than SGOV.

existing_for_fun

I mean, I kept the cash in SGOV and just sold puts on margin. If I was going to be assigned I can just sell the SGOV shares for the cash. But yeah. Nothing wrong with it in SGOV

noncompact_leaf

Thank you for offering this! I just computed a few ideas for both buying puts and selling calls, and I'm not really finding a contract that would be better than just buying SPY after all... But if you're willing to help, would you mind giving me your take on what you would do? Another commenter convinced me to just give my full account details, so I wrote it here and will probably delete later 🙂. >Twenty-something, single, working 40-hours per week, full-time student, don't have time for anything else, including thinking about finances. Salary about 40k/yr but crazy frugal so I realized this year that I somehow have saved $300k over the past 20 years without realizing it. (Just reached that today.) >I realized a few months ago that I should really start doing something smart because I could be able to help out my family and friends in the future. So I put about $50k into Mag 7 stocks and about $100k into some total US market index (DFAC). >Today I skipped my afternoon work only because I thought I need to figure out what to do with the rest of this $150k because I don't want to realize in ten years that I wasted it. (Like I kind of realized this year.) >But after reading these comments and looking at options prices, I guess I'm actually not missing out on some obvious place I'm supposed to be putting the money to make it grow, like I thought I was. For instance, the 1-year covered call contracts available now for SPY are equivalent to buying and holding if the market does 10%. And like the other commenters mentioned, there's no big advantage to selling puts vs just buying SPY. >So I'm thinking I should just move the SGOV to SPY and leave behind a little to buy more in case the market drops after buying. (I just don't want to be missing something that would be smart to do.)

noncompact_leaf

Hi, well I didn't think anyone would have time to help if I gave the whole story, but the people here are surprisingly nice, and I can always delete this later, so here it goes: Twenty-something, single, working 40-hours per week, full-time student, don't have time for anything else, including thinking about finances. Salary about 40k/yr but crazy frugal so I realized this year that I somehow have saved $300k over the past 20 years without realizing it. (Just reached that today.) I realized a few months ago that I should really start doing something smart because I could be able to help out my family and friends in the future. So I put about $50k into Mag 7 stocks and about $100k into some total US market index (DFAC). Today I skipped my afternoon work only because I thought I need to figure out what to do with the rest of this $150k because I don't want to realize in ten years that I wasted it. (Like I kind of realized this year.) But after reading these comments and looking at options prices, I guess I'm actually not missing out on some obvious place I'm supposed to be putting the money to make it grow, like I thought I was. For instance, the 1-year covered call contracts available now for SPY are equivalent to buying and holding if the market does 10%. And like the other commenters mentioned, there's no big advantage to selling puts vs just buying SPY. So I'm thinking I should just move the SGOV to SPY and leave behind a little to buy more in case the market drops after buying. Does that sound right? I might be missing something really obvious!

Dsrtfsh

SGOV makes sense in a portfolio structure. You’re not telling us the whole story. You can use margin against SGOV to try your CSP strategy. Going from SGOV to CSP is a huge leap.

noncompact_leaf

Good points, thanks. Right now I have the cash sitting in SGOV, which is kind of stupid. So probably I'll just sell the puts since it's not as big of a deal.

noncompact_leaf

I need something where the exit plan is simply buying the underlying shares. A low-maintenance plan is also a premium. So I'm thinking of selling monthly or weekly puts and just let them expire. The main goal is just that this money should be working a little more than just sitting in SGOV.

noncompact_leaf

Thank you! It's not easy to find a clear explanation on this. (All buying power can be from SGOV -- got it.)

iWesTCoastiN

And for some reason it's not applicable for state taxes? Interesting 🤔 I noticed you said stock so it's not like a HYSA or MMA in the sense that there's no risk involved? For the SGOV there's risk?

tarrat_3323

yeah i was looking at FLOT, PAAA and JPST with some SGOV.

me_xman

Sitting in SGOV BIL.

crazybutthole

JAAA is pretty safe at near 6% but its not zero risk. if you went with a bucket of 40% JAAA + 60% SGOV or similar - you would average out near 5% and reduce the already minimal risk. (or throw 10% in sp500 and boost your risk and hopefully increase the return as well)

tmssmt

Robinhood (for ease and accessibility) and dump into something like SPY. If you want to be extra conservative and risk nothing, SGOV

iWesTCoastiN

I googled SGOV and was completely confused. How does one go about investing in this?

bbmak0

So, you are only getting 3.85% yield from SGOV, and the broker charging you 5.25% from margin. How do you make a profit?

Fhyzikz

Why not just park it in SGOV when you're not trading? It won't go up much but it's something at least

Heyhayheigh

So I teach my nieces who are not working yet to invest 10% of their deposits to VOO. The rest stays cash SPAXX (Fidelity). If they want to invest more they can. They know when they start working they will auto buy VOO a weekly basis. They know they will learn as they go, Rome wasn’t built in a day. But that beginning is the foundation. They even know about SGOV, but the default money market is fine. It is teaching them the habits that’s the most important. They know to pay their future selves first.

Ozqi

If you’re not using your 1k interest free margin to buy SGOV so that it offsets your entire cost of RH Gold and you essentially get all the other benefits for free, then what are you doing?

After-Question3165

FLOT holds floating rate corporate notes. SGOV holds ultra short duration treasuries. Completely different

LanceX2

Flot is not Tax exempt like 100% of SGOV is. 

baseballer213

Think of the bond market like a seesaw: when people dump treasuries, the immense supply forces prices down, which automatically pushes yields up. If the EU dumps, long-term bond funds (like TLT) would get absolutely hammered because they are stuck holding older, lower-paying paper that nobody wants anymore. SGOV is different because it has zero commitment issues. It holds bills that mature in 0-3 months, so it barely flinches at price drops because the duration is so short. Instead of your principal tanking, SGOV just rolls over into those new, higher-yielding bills almost immediately. You wouldn’t see a price crash; you’d just see your monthly payout go up while long-term holders weep.

Titanium-Marshmallow

It will hit hit the fan across all assets except perhaps gold. And maybe crypto? It truly is a nuclear option if EU dumps their treasuries. Prices down, yield up, who will blink? Who will buy? A shitshow. When you invest in a bond fund (SGOV, TLT etc) there is no concept of holding to maturity. If the market price of bonds drops, then the NAV of the fund drops and you may not ever get your principal back.

Heyhayheigh

If you’re the sole heir, take the assets into your name and be done with it. There is no real purpose to a trust with only one heir. You could do whatever you wanted and there is no other heir to sue you… check with your lawyer of course, but that should be how it works. Taxes are needlessly expensive, to pay (if you’re silly enough to be taking them as an entity) or file. Your parents went to a lawyer asking if they needed a trust and that lawyer got a sale. Why take loans? Just cash out what you can from Roth in different years, put in SGOV while you do the construction. Don’t be in such a hurry. Sounds like you’re in a good spot.

igycb

SGOV

TheSleepyTruth

Well you said you wanted to "reliably" make money by 1 month, suggesting you will need the money 1 month from now. Best way to guarantee that is money market / HYSA / SGOV etc. If you buy stocks... you might have more money in a month, but you might have less money. In fact there is a decent chance it will be less money, certainly not a "reliable" way to make money in 1 month.

Melodic-Scheme8794

SGOV slashed my dividend by 10% today. Fuck JPow.

Any-Cup8629

Lmao, SGOV

gotnothingman

SGOV, guaranteed payout in one month.

Heyhayheigh

SGOV

jerseyben

Almost in the exact same situation. SGOV is great for a safe place to park your money. Here's the rub... You get excited by the state tax exemption, which is huge in NJ. However, it's still ordinary dividends. This isn't something that gets brought up enough. If you live in NY or NJ, chances are you are high enough income that you still get nailed on these ordinary dividends. That's why I'm currently looking for something fairly conservative that pays Qualified Dividends. SCHD or ADX is an easy one but also exploring alternatives.

rkoloeg

I just use a spreadsheet and the money is all in one fund (VMFXX in my case, but SGOV works too). Currently I have about a dozen categories in there. Alternatively you can make separate brokerage accounts for separate purposes if you want the the interest from particular funds to roll back into them (although you could track that in the spreadsheet too). I did this with my future house down payment, it's just in a separate brokerage account labeled "House".

GaylrdFocker

I use BOXX as my Emergency Fund, SGOV as my Escrow and future IRA contribution fund, and SPRXX as my sinking fund. There are plenty of other funds you can do this with, it's just a matter of what you are comfortable with.

DennyDalton

If you have $5k, then an initial margin rate of 50% means $10k of buying power. Doing so with SGOV will net you $10 per month. If you put the $5k in a treasury bill or your broker's MM fund and you earn 3.85%, you'll net $16.67 per month. So what have you accomplished by buying SGOV on margin and earning a lower return? AFAIK, a broker (not portfolio margin) will not allow you to sell puts against a fully margined position, leveraging the leverage Let's ignore the SGOV and focus on the puts. The typical margin requirement for a naked put is about 20%. If you fully leverage, you're adding much more notional value than you have buying power. For example, with $5k, if you sold two puts with a notional value of $50 (strike price less premium) and you were assigned, you'd have to buy $10k of stock. Your buying power could handle that. Assigned on more than two of the five @ $50 would mean a margin call. Now, a quick lesson on margin. As noted above, Reg T margin for long equity is 50% (brokers can require more). The Reg T maintenance margin (MM) for long equity is 25%. Brokers can require more and it is typically 30% (for example, Schwab). Despite what many think, this does not mean that stock price can drop 50% before you get a margin call. It means that there must be a minimum amount of equity value of 30% or more of the total value of the margin account. For buying $10k with $5k of collateral, that means that if the value of your position dropped below $7,143 (a loss of 28.57 of its value), you would get a MARGIN CALL!!! (7,143 - 5,000)/7143 AFAIC, if you want to leverage a bit, use vertical spreads so that the potential margin requirement doesn't blow you out of the water.

Away-Tour-203

Consider your risk tolerance and investment goals. If you are looking for stable income and don't want to take on the risk of price fluctuations, SGOV might be a better choice for you. In contrast, VNYTX may offer a higher total return, especially considering taxes.

Heyhayheigh

You should have asked chat gpt. It would have told you to not use long duration for an apples to apples comparison. Long duration munis introduce price risk. There is a short duration find. But honestly it’s just easier to use SGOV. VYFXX is the other fund according to jippity. I didn’t check for hallucinations, fair warning.

therealjerseytom

VNYTX are long-duration bonds, SGOV is very short duration. The significance is that long bonds have much more interest rate sensitivity, as you can see in a chart of VNYTX versus time; your principal amount can fluctuate up or down and there's risk associated with that. Whereas SGOV is very steady. There are short-duration muni ETF's out there though, like JMST.

smb3d

I'm interested in this as well. I also have roughly $200,000 currently in SGOV. The yield isn't as high as it used to be as well.

Heyhayheigh

I think you’re right. But that HYSA won’t beat SGOV for long. And what state do you live in? Do they have state tax? Because SGOV would be better for that as well. Brokers also allow you to know historical performance and compare to a benchmark. So you would know what you gave up by not being invested in VOO and chilling (sp500 for example). It is a slight tweak. But a great habit for you guys being so young. I find people spend HYSA way easier than liquidating SGOV to spend. You would think it shouldn’t make a difference, but I can tell you anecdotally it does. Either way best of luck. My comment was meant to help. Take with grain of salt.

Actual_Stranger_1766

maybe i’m wrong but i think her 4.1% is currently paying a higher % then SGOV currently? maybe not by much?

Heyhayheigh

Use SGOV instead of HYSA. Buy whatever of those ETFs you like, just do it auto and weekly if you can. The best plans don’t rely on self discipline. Sell only when you have an urgent expense to pay for. If you want to switch the auto, that’s fine: VOO to SCHG to QQQM or whatever. Just never remove the auto. Always have an auto. Work to increase the auto. The longer you do this, the richer you will be. Best of luck!

Sufficient_Winner686

Open a brokerage with Fidelity, they have no trading fees and it’s free to open the brokerage. From there, you’ll transfer the balance into the brokerage. It will automatically go into what’s called a money market account, which is basically a HYSA that pays like 3.5% APR. What you’re going to do now is buy SGOV. It’s a stable 0-3 month ETF that holds bonds. Low risk, money pay, roughly 4.5% annual return. You’ll hold here and watch the market. You’re waiting for a day where SPY drops by around $10 per share. It happens every few months just by folks taking profit. This is what’s called your buy-in price. The next day or two, the price will recover and continue up. This is a pattern I have followed for a while now. SPY is an ETF that tracks the S&P500. It generally returns somewhere between 15-20% on average years and 25-30% on good years, and of course it can be negative on bad years. You’re looking at a 30 year investment horizon. If you just do this and add to it, you’ll retire a millionaire.

Heyhayheigh

Use SGOV instead of HYSA. Buy VOO auto and weekly. Whatever you can afford after having emergency fund. Sell only when you have an urgent expense to pay for. That’s it. That’s all you really need to know. Your 401ks should be sp500, your Roth can have some stocks if you want a little more spice and have super long time horizon. All bluechips, don’t trade in and out. Spend less, invest more, automate. Don’t panic sell. That’s all anyone needs to know. You probably should find a trustworthy pro and delegate these tasks. They will soon not be worth your time to keep up with. Best of luck and sounds like you will do great!!

bam2350

Minimal risk: HYSA, SGOV, Treasury Direct, CDs Historically dependable but has risk: VOO, DIA, VTI, ect. Plow money into saving while you can -- establish your emergency fund, max those tax advantaged accounts, pay yourself first, save for your next car, save for a down payment on a house

PashasMom

I do, but within reason. I'm not going to have 12 different sinking funds with 12 different ETFs. Right now I have four: SGOV (taxes), VUSB (home improvements), PAAA (pet emergencies) and TBUX (travel). This is in addition to my general emergency fund which is in a money market fund.

therealjerseytom

I don't get that granular, no. I suppose there's no harm in it; there are several ETF's out there similar to SGOV.

DoinIt4DaShorteez

You can do it, but it's kinda ridiculous to not just be able to do it in your head. Just put all the money into SGOV and get a bunch of envelopes and write the purpose and amounts on them as you go.

Orki030

Good morning, my view. The benefits of ETFs such as SGOV for different savings goals can be seen as a modern implementation of the proven envelope system, which offers advantages in flexibility, return opportunities and overview, but also requires more management. Corresponding recommendations can often be found in savings and ETF communities, while financial experts take individual risks and costs into account.

therealjerseytom

Impact on SGOV? Probably none. Are there ETFs that benefit from a Treasury sell-off? Sure; there are inverse ETFs out there.

mulberryzeke

Get her in SGOV. It's very short duration gov't bonds, so no interest rate risk, and ~4.2% 7day yield. Very liquid.

TwistedPacket74

I have RH and on my account I can only use cash to buy a CSP not stock of any kind. Test it out and buy $2500 worth of SGOV and see if you can use it as collateral I don't think you can.

MutaliskGluon

Lost 2.5% on the port today as EOSE tanked 10% and my QQQ puts were only up 2%. 50% SGOV and I get a 2.5% down day as my high beta long just got demolished. Rough day. (this is for the people who say all i do is lie about buying low and selling high)

MutaliskGluon

omg look at the EOSE chart for today. Jesus christ I got fucked today haha. 2.4% down on the port today, and thats with the port being 50% SGOV as well as being long/short to hedge lmao

Sufficient-Curve-853

Works if ISHG or LEMB have a higher div in late Dec and the money returns to SGOV.

StatisticalMan

Dividends are not free money. The shares go down by the amount of the dividend paid. Exactly to the penny. The shares accrue value daily regardless of when the dividends are. SGOV could change to one dividend per year and it wouldn't change anything.

bobdevnul

Yes, SGOV and similar funds have two dividend payments in December, one early in the month and one late in the month. There will be no dividend payment in January. There will be one in early February. That schedule is still close to monthly. There is nothing to be gained by selling and rebuying.

I_like_code

I’m in favor of just putting it in the market now. At the very least put them into the IRAs and buy something like SGOV until you figure out what you want to do.

redhill_qik

No, it doesn't make sense to sell and re-buy. The dividend payments are determined by the interest rate for the short term Treasury bills that SGOV holds and the days between each distribution, so the second December distribution is lower and the February distribution is higher.

Sufficient-Curve-853

Interesting idea - there is definitely some mismatch in dividend dates between iShares fixed income - say SGOV vs. ISHG or LEMB - although those 2 skip some years entirely. If the account is not taxable it could make sense but also seems like some extra work that might not amount to anything. Would be wild if big hedge funds or that math guy that died recently, Jim Simons, had some massive play around year-end fixed income divs.

SirGlass

What are you trying to accomplish by doing this ? It doesn't matter when you buy or sell SGOV ?

StatisticalMan

There is no free money in the market. The value of SGOV shares accrued roughly 1/365th of the annual yield each day. Every day you get 1/365th the yield (minus a tiny amount of variance). What day you sell or buy or buy and then sell or sell and then buy has no impact on anything.

dankappledrank

I noticed that for whatever reason SGOV pays twice in December and has 0 dividend payouts in January. Does it make sense to move that money to a HYSA/another bond ETF for the month of January and then back into SGOV before February's Ex-Dividend date? Or am I missing some important detail here that means it makes more sense to just leave it in SGOV for all of January, e.g. the underlying price of SGOV will dip enough after December's 2nd Dividend payout that exiting SGOV in early January will negate any potential gains.

SnS2500

\> My understanding is that it does NOT matter what day of the month you buy SGOV /thread

BinBender

SGOV is very liquid, and it's hard to get screwed. Just trade during regular trading hours, and the spread is tight (rarely more than a cent), and your order will likely be filled close to mid price. If you overpay by a cent, you lose a dollar, or one day's gain. Don't sweat it. If you trade outside of regular trading hours, you'll need to pay a bit more attention, as the spread can be wider. Still, if you miss a little, you won't get *screwed*. You'll usually be able to trade very close to the closing price, maybe add a cent or two in premarket. On the first of each month, you need to subtract the monthly dividend.

WinstonSalemSmith

Yes get out now and open a regular account with Fidelity, Schwab etc as suggested above. Then go with conservative investments such as VOO or Berkshire Hathaway BRK -B. If you want to wait on stocks SGOV short term USA bonds pay over 4 pct annual interest. This is like holding cash + interest. International bond fund is BNDX, also over 4 pct, but I don't think the duration of the bonds is as short. The point is you can make $4K/yr this way.

TJMBeav

$SGOV

ladyeclectic79

SGOV essentially pays out its “dividends” on a daily basis. The stock goes up ~$.01/day, with a few days where it might jump a few extra cents or stagnate. Folks know this so they’re not going to buy for a higher limit price as it’ll just get to that new point in 1-3 days. All that to say: buy today at whatever price the market’s at. Even if you hit it at a higher limit price today, each share will still be worth more by tomorrow or Wednesday.

Slartibartfastthe2nd

Depends on the volume of shares being purchased. The spread on SGOV every time I look at it is $.01. A one cent difference on 100 shares is $1. If you are sweating that then you likely have larger issues.

investingtruth

You're leveraging twice here by borrowing to buy SGOV, then selling puts against it. If those puts get assigned, you need cash to buy the underlying stock. With only $10k in SGOV as collateral, you might not have enough buying power, triggering a margin call or forced liquidation. You're also paying 5.25% to borrow money to earn 3.85% on SGOV, that's negative carry on the borrowed $5k. The put premiums have to cover that gap or you're losing money. The math looks good until something breaks and with leverage, things break fast. Start with cash-secured puts first to learn the strategy without margin risk. Only add leverage once you've proven it works without blowing up your account.

N0downtime

Only use the $5k in SGOV. Then you aren’t paying interest. You can still sell puts on your whole buying power if you like.

Doctor_Raymos

1. SGOV bought on margin cannot be used as collateral for CSPs 2. The "entire profit" you are talking about is 60$/month. And the risk? Margin risk, Bond risk, Liquidity risk, Assignment risk, volatility risk, margin call if SGOV lowers even slightly 3. Point 1 means that your CSPs are not cash secured, they are naked. Your cash will already be used, you get margin called, and you will owe a LOT of money you probably can't pay. 4. SGOV yields 5.2%, you borrow at 5.25%. That is a negative carry trade You're essentially trying to create a worse version of the wheel

papakong88

Correct, but only 70%. The SGOV you bought on margin has no cash value.

Initial-Front-777

I believe SGOV would be treated as cash equivalent, which would count towards cash.

Initial-Front-777

My understanding is that SGOV can be used as cash or cash equivalent. 🤔 The margin interest rate with the broker I would use for the trade is 5.25%, not 12%.

Initial-Front-777

Explain please? I understand margin % rate is higher, but I’m pairing it with my own cash. I understand it as the margin interest expense will be less than the SGOV return.

Initial-Front-777

It’s seems to me using margin directly is more risky than putting it into sgov to use as collateral. The price on SGOV won’t fluctuate as much as an option price would.

Initial-Front-777

Im using robinhood for this trade. I believe the maintenance ratio is 25% on SGOV.If im doing 50/50 I believe I should easily meet the requirements.

papakong88

You have 10 K in SGOV and have 5 K in margin loan, your equity is 5 K. Only 5 K can be used as collateral to sell options. Most brokers charge 12% margin interest.

Costheparacetemol

When red rates change, both the interest on new SGOV and also the margin rates both change too so unlikely to mess with the general plan

Costheparacetemol

That’s true, however fwiw I believe Robinhood allows 99% of SGOV to be used as collateral.

Party_Shoe104

Seems genius to take out margin on SGOV as it should not be too volatile. Although, what happens to your margined SGOV position if and when rates drop? Based on the Fed watch tool, there is currently an 87.6% chance that the Fed drops rates by quarter percent on Dec. 10th.

ImprovementMain7109

Your 50/50 VT/SGOV idea isn’t crazy, but at 60 the right mix depends way more on: when they actually want to retire, Social Security/pension amounts, debt, and how much they spend. Before touching allocations, I’d map that out and probably pay for a one‑time session with a fee‑only CFP, just to avoid guessing with the last 20–30 working years.

Siks10

I did something similar a year ago. With "cash" you mean SGOV, right?

papakong88

If you are selling naked puts, you will use the buying power of your securities as collateral. In terms of buying power, SGOV do not have as much buying power as T-bills or money market funds. SGOV’s BP is 70% of its value while T-bills have 97% and money market funds have 100%. I do not use SGOV. In terms of safety and yield, all three are about the same.

SDirickson

>SGOV has lost 40% of its value since 2022. No. If you can't read charts, the wheel may not be for you. SGOV has been flat +/- less than a percent for over 5 years.

Siks10

What now? SGOV is near ATH

golden_bear_2016

> SGOV has lost 40% of its value since 2022 lol what