SGOV

No_Alternative_6206

SGOV is basically as safe as cash. What can happen and what has happened before? Look at other crashes in the past. If you get too many people who sell SGOV at once because they need the cash, this is any bond fund’s worst-case scenario. Bonds are made to be held to maturity, and when they are not, people generally lose money. SGOV has an incredible volume, so there are usually plenty of buyers and sellers. In massive market crashes, it’s gone down a small bit, then fully recovered in just a couple of weeks. As you said already, these bonds recover at full maturity very quickly.

logsqrtexp

the topic is risk when holding bonds vs a bond fund for different durations and holding periods Funds have no maturity, no option to “hold until maturity” NAV can erode. for SGOV it’s moot because there so little duration risk anyway OP doesn’t need to hold “at least x” not to lose money fin.

t3chi3

I have a lot of SGOV as well, but like to keep it there for a bit. SNSXX is pretty forgiving for buying and selling frequently and 24 hour liquid.

Kakakee

I would put the lump sum into SGOV and DCA in 10% of the remaining amount weekly or monthly So it’s less and less getting put in over time. Plus getting monthly dividends from SGOV and keeping the money somewhere safe and stable.

bobdevnul

Even better with VBIL, 0.06% vs 0.09% for SGOV. VBIL is functionally identical to SGOV. They are both 0-3 month Treasury bond funds. A lower expense can lead to a slightly higher yield, but the quoted yield is after the management expense.

SnS2500

I've held CMF in the past but the current environment is disastrous for muni and other bond funds. You would have lost money holding CMF this past year. CALI would have gotten a 1% total return, so a better than losing 2%, but SGOV or another t-bill etf or money market is currently far better for any top bracket Californian for cash.

DoinIt4DaShorteez

There's a difference in that FDLXX mainatains a daily NAV of $1.00 and the daily dividends it accrues go into a separate bucket. So when you take money out of it, you never have a cap gain or loss. You buy at $1 and sell at $1. The short-term treasury ETFs like SGOV, the accrued income gets built into the market price. So they go up about a penny a day. So if you buy let's say on the 5th of a month and sell several months later on the 20th, you're going to have a small capital gain. Same thing in reverse, if you buy towards the end of a month and sell at the beinning of a month, you'll have a small cap loss. It doesn't really affect your total return, but it's an extra accounting step that has to be dealt with at tax time.

Rodrain2

It's him that does not understand the ETF. Just look at 2022 when interest rates were rising exponentially and longer duration bonds were getting killed, SGOV gained 1.5%. Tell dude to go sit down

Wendy888Nyc

I use SGOV in my brokerage account but recently starting parking cash in FDLXX because it's a drop easier for future withdrawals. Are these 2 options basically the same otherwise?

Prize_Raisin7936

SGOV + GPIX + individual shares + a little bit Gold

logsqrtexp

Yea - FWIW, Money markets (SWVXX) are very close to SGOV 3.35 net vs 3.5 net 🤷‍♂️

logsqrtexp

I wasn’t talking about SGOV in my last comment, though, which has a short enough duration holdings not to see principal erosion when longer term rates go up. With SGOV it doesn’t look like any holding period is relevant. It holds 0-3 month tbills and so is immune to most duration risk.

UncleTito27

Better than SGOV

Pure_Psychology_2700

i think what happened is the OP got bummed over NAV dips after a distribution and didn’t realize the gross return still shows the face amount and interest; if you hold to maturity you’re fine, the only risk is a tiny price drop you’d only feel if you sold right after a rate spike. basically there's no scenario that makes SGOV lose principal if you stick around for the 3‑month roll.

koalaification

i sold my nvda from my roth ira at 222 last week, then it spiked up to the current price u see today (234). i regret it a bit but i did think the price was gonna come down again to the 199s/low 200s figured ill buy in when it goes low again. (cost basis at the time was 210 which i felt was too high) i did the same w my VT back in march, sold everything at the bottom and the stock skyrocketed the next day. i didnt buy back in, thinking itd crash again. foolish foolish foolish. i was scared id lose what i started out with, i couldnt bare to see it go negative so i sold but if i had just stayed it would have been an incredible run. i put all the money from that VT sell in my brokerage into my HYSA (it was getting 4.25% at the time, now it's 3.6%) the roth ira money from nvda i placed into SGOV. i figured the low gains would be preferabld to a negative year or stagnation but i was wrong, things can really turn around and u dont wanna regret missing the gains bc u pulled out

alex_57_dieck

That post, and OP's reply, and the context of "financial advisor"'s claim are entirely about BIL and SGOV. The replier mentioned bond ETFs, in a context that has no need/make no sense to generalize to arbitrary bond ETFs, beyond BIL and SGOV. That seems like a textbook definition of strawman. Of course, we can agree to disagree. Happy a good day.

Wigglebot23

The "hold for three months" strategy will in fact work for SGOV since three months is significantly longer than SGOV's duration

rithsleeper

That’s a secondary one. I’ll have to dig for the original . It might be deleted. The original post I was clear about BIL (I didn’t say SGOV) but essentially the same

rithsleeper

See even this I think is wrong. And I thought of this scenario. But SGOV ladders its bond purchases. So the majority of the holdings would be about to mature: only the bonds that were purchased in month 5 would have a meaningful decrease in principal. I.e. SGOV buys $1k of bonds every day and the last day, and interest rates spike to 10%. Well that last day the 1000 would be worth $990 (4% interests rate purchase) down to $975 ($60 loss due to 6% increase) that’s what the new bonds would be sold at the new rates (10%=$100 divide by 4=25). So you’d lose $25 but one the initial investment of 5.5 months, you would have made like $72. I’d have to do the math but I still don’t think that’s enough.

ay-guey

you can catch a similar dividend with SGOV in the meantime without eating the price drop. if i were jumping in VTIP for the next few years i'd prefer to have a lower entry price for long term gains.

Xenikovia

You build your emergency fund in your taxable account first. Since it's emergency first and growth second in the taxable account, i'd invest it right now - 20% to 30% VOO 70% to 80% SGOV (0-3 months) or SHY (1-3 year treasuries)

Automatic-Unit-8307

I am down $500 on SGOV...but up thousands of they included dividend on the cost basis

Livueta_Zakalwe

I’m using a modified version of the Permanent Portfolio - about 20% in gold, 25% cash (SGOV), 30% equities (various ETFs) and instead of holding long bonds (0%) I’m in various divvy stocks, DGRO, VYM, VYMI and some covered call ETFs (GPIQ, GPIX). If (when) the 10 year gets to 7%, I’m going to start building a treasury ladder (no bond ETFs - look at TLT and VGLT - 20 year bond funds losing value every day while paying less than the actual 10 year!). Sorry - a long way to say SGOV is fine, but in general avoid the bond funds like the plague in a rising interest rate environment.

irlsheldon

Look, I 100% agree on the conclusion, the risk is practically zero. But if you are looking for the worst case scenario, it's when you buy at low interest rates (< 1%) and then get a quick spike of interest rates RIGHT BEFORE selling. All other cases as you mentioned are safe. The quick spike before selling is problematic because the market would price the interest rate spike immediately into the SGOV price but you would not have the benefit of waiting X months to gain from the increased interest rate.

rithsleeper

A spike is what I meant by 5-45% interest rate. That’s why I even gave “the guy” that and said there might be a small loss on paper but it would all even out if he held to 6 months and would have a profit. My longer thought process is, day 1 I buy a 3mo t bill for $10,000. Day 2, something happens where interest rates jump from 4% to 13%?! Like what? How, why, but whatever…. After 3 months. The T Bill is worth….. $10,400 right? Money made, nothing lost. I was clear we are holding past 3 months, not “I may have an emergency at week 2 and need to cash out… Now, I realize SGOV is laddering buying bills. So the scenario I would think might be an issue would be a continuous raise that would happen a month into the process where the month 2 T Bills purchased still have a month until maturity and are still underwater. However, this is why I clarified holding to 6 months to concede the 3 months has a slight chance to lose maybe 1% realistically but would all come back if continued to hold. Maybe if interest rates were raised 2% every month for 6 months in a row? But even then I still don’t think there would be a loss.

No-Choice-8876

you’re right that if you \*just\* sit for the term, SGOV is basically zero risk. the only price hit comes if you try to sell \*before\* the next 13‑month bill matures and the short‑term yield spikes. that would only happen in an overnight rate jump—pretty rare. that’s probably what the second guy was thinking when he said “if I have to explain how rates work, this is over your head.”

Informal-Lime6396

The guy OP was referring to mentioned bond ETFs, not SGOV.

not_my_monkeys_

OP is confused over the difference between SGOV and holding actual bonds that have maturity dates.

alex_57_dieck

we are talking about SGOV though, not an arbitrary bond ETF. You are too close to maturity for this to matter

qwembly

Bonds have been awful, but now should be returning 5%. Short terms treasuries should be around 4%. Not sure what everyone else us doing, but for the first time in my life I bought some Bonds, and I also have some money in SGOV.

abeBroham-Linkin

SGOV isn't going to make you rich. It's to be 'safe' when everything is going downhill (market). Even if inflation hits high, SGOV would be better to have vs negative

Infamous_Ad8730

You are mostly correct, except the 3 month hold is not. You will always make some money on SGOV unless ultra short term US bonds go negative (never). 3Months has zero to do with it.

logsqrtexp

Holding a fund (SGOV) isn't the same as owning bonds. With a longer duration (10, 20 e,g,) a bond fun can lose value since there's no concept of holding to maturity. SGOV is such short duration there isn't much as much risk so the fund wouldn't lose "much" value. But the "hold for 3 months" strategy only holds if you have actual bonds, rather than shares in a bond fund. Go ahead with SGOV :)

Me-Regarded

It depends. Not that risky depending on what you are trading. Shares, pretty safe. But you can get stuck and if you have a bunch of margin costing you daily and you can't sell, that sucks. I mostly use margin intraday if day trading, I can go nice and heavy and not worry about taking money from SGOV unless that's how it goes down end of day

spddemonvr4

From a finance perspective, they are zero risk. Your capital will never decrease. The only thing that changes is the Interest rate, which isn't part of the risk equation. That's only opportunity cost. All risk is calculated against the treasuries and SGOV is an easier way to hold for shorter terms than buying the 3mo treasuries and cash being tied up. I hold my cash in sgov instead my brokers sweep accounts that pays me .00003% a month. Then when I find a trade with potential upside, I can liquidate the sgov shares and buy new positions same day.

54415250154

There are a lot of types of risk, you are talking about interest rate risk, but there are many other types of risk. I would disagree that holding SGOV/BIL are "zero risk". They are certainly low risk, but purchasing power risk, reinvestment risk (not really relevant here but just giving some examples), political risk.... these are all worth considering. Risk can also be defined in many ways and it all depends on your personal goals and tolerances

Elendil2500

Maybe he held SGOV one time and got confused because his brokerage didn't count the dividends received from SGOV, so on paper it looked like he lost money even though really he didn't?

Negrom

Basically nothing. The main risks with $SGOV are its yield falling as interest rates decline and its returns being outpaced by inflation. There can be tiny short-term price fluctuations, but barring an extraordinary disruption or default in the U.S. Treasury market, the real risk is about as close to zero as you can get.

PHL1365

I was just evaluating strategies on how to invest that cash. Just wanted to get something a little bit better than SGOV or CD rates. In the meantime I was evaluating how to create a medium term bucket inside my IRA. Google basically said I don't need one.

Dry_Report_3494

SGOV it number 1, 2nd best SGVT fuck what everyone else says.

thorn960

Berkshire really doesn't follow the index closely. They are not tech heavy enough to follow the S&P 500. I like them because I feel like they will do well if we have an AI bubble crash. I have a 40% position in BRK b. It's a good one if you are heavily taxed on dividends since it doesn't have one. Seems like a bad time to get into bonds unless you think we are going to get out of Iran soon and inflation is going to go away. Raising interest rates will eat at the value of your bond fund or the value of individual bonds on the secondary market. The only bond fund I do is SGOV because it's all 3 month T bills. Buying individual bonds and holding to maturity is an option but inflation could eat away at it's value.

Ok-Disaster-551

I'm 40% cash (SGOV actually). The rest in equity. I see SGOV as the middle ground right now. Waiting for something big to show up on either the equity or the bond side to see where to go.

viperex

There's always SGOV and its kind

True_Place_3835

True, but I don’t understand enough about economics to determine if I can get an equal or higher yield with SGOV 6 months from now when I can lock in a rate for one year with other options at near or over 5% pretax

LanceX2

12 month EF + 10K sinking fund all in SGOV. outside of that aim investing and paying down my mortgage

Accidental-Genius

I did basically the same thing and just parked it in SGOV while I figure shit out. I may even buy back into the same positions but I’m up more than I ever dreamed I would be and don’t want to fuck it up.

leraning_rdear

SGOV is good. Consider VTEAX though there is some risk to offset Federal tax exemption

082426grateful

This is good advice. Happy with my large investment in SGOV, though I’ve had to peel a bit off of late as life is getting expensive. Holding SGOV inside and outside of retirement accounts.

DoinIt4DaShorteez

So your math: Acct value is $27k, you say 10% ($2,700) is in cash and that's 2 years of RMDs so your current divisor is around 20 and your annual RMD is $1,350. I don't think it's necessarily a bad idea to keep 2 years worth of cash, but sweep accounts are usually low interest. If you are not getting over 3% in the sweep account, I'd put the cash in SGOV, even though we're really talking about a smallish amount of money so it won't make a huge diff. I think the allocation of 60/30 VOO and SCHG is fine, nothing really to argue about there. Only thing I'd say is that if I'm correct about the RMD divisor currently being around 20, don't forget you have to empty the account by the end of year 10. So if you're taking small RMDs, the account value could easily still be worth $27k or more in 10 years and if you've only been taking the statutory RMD amount in years 1 - 9, you'll have $27k+ dumped in your lap in year 10. Could have some tax consequences, but they probably won't be awful.

plurality

Fair points. I was putting my e fund into t bill ladders but ultimately changed to SGOV to avoid the headache for the small difference. But thanks for clarifying.

Livueta_Zakalwe

For safety go to short term bond funds like SGOV or VGSH. You’ll barely keep ahead of inflation, but you won’t lose money. At 7% on the 10 year, half my portfolio is going into a treasury ladder.

KeithGre

3 reason but they are minor 1. No expense ratio on T Bill so T Bill will pay higher 2. Zero Principal risk while the etf has a NAV so there is principal risk with SGOV 3. T BIll locks in a set rate In know exactlly what I will be getting at maturity Again I was just playing with treasuries as it was my first time actually buying them on my platform. It add a level of complexity but I dont mind I am trying to learn how treasuries work. In the end it only added a few bucks to my return so to some the juice may not be worth the squeeze. I dont mind for now but sgov for short term is just fine. Longer term 1-5 year I definitely want stick with individual treasuries.

__redruM

You have 10 months of expenses in your HYSA, that’s a bit more than you really need. If you already know you’re behind, then you know some risk is needed to catch up. But you don’t have to stick the HYSA money in an IRA, drop it in a brokerage account in VT or VOO. That way it’s still available if you need it in an emergency. Keep 12-15k in lower risk like SGOV, and the rest in VT or VOO. **If you really want bold lifestyle anectdotes, /r/personalfinance has you covered better than /r/investing**

No-Sympathy-686

My SGOV tanked overnight WTF!

TheProffesorX

Why SGOV vs like an equivalent high yield savings account? I’m new to SGOV

Specific_Walk7476

Not enough people talk about CSHI as an alternative to SGOV. Very stable and higher yield than SGOV because of juicing an extra point off SPX options.

Taggart3629

We're trying for a sturdy and fairly large "bond tent" during the early years of retirement, which will actually be a combination of a MYGA, a TIPS ladder, SGOV, and AAA CLO, with some dividend income. It may be as large as 40% or 50% depending on what the market conditions look like in a year or three, when we're ready to pull the trigger. Our CFP's guidance is to gradually pare down the bond allocation the further we get into retirement because the sequence of returns risk are highest early in retirement. This article was really interesting because [it uses S&P 500 data over a 20-year period](https://www.agwealthm.com/post/understanding-sequence-of-return-risk-the-hidden-threat-to-retirement-and-early-retirement) (2000 to 2020) run forward when the market was tanking to the current long bull market, and run backwards to show what the 4% rule would do to a portfolio if the market downturn happens early in retirement versus late in retirement.

R3jinx

Real question, why would it be a bad time to buy long term Treasury's? With rates at a 20 year high I wouldn't go full send just yet but I think we are closer to the bottom than the top. I think starting to put some weekly invest in long term us debt could pay off of interest rates come down in a few years. Worse case you get a round 5% or better on your money untill the rates come down. But yes a very different play than SGOV.

andybmcc

5-7 years is a short time.  It all depends on your tolerance for holding off on whatever you want to use it for.  Maybe some mix of AOR and SGOV?

Think_Currency_8586

Bro just buy SGOV 🤣😂

Brave_Inspection6148

Discipline needs to beat out motivation. You're motivated to make money, but you are -- at present -- not disciplined enough to understand there are different ways to make the money. Max out your IRA, 401k, and HSA. Contribute a little to a 529 if you plan on going back to school. Put a few months cost of living into I-bonds, T-bills, or treasury ETF like USFR or SGOV for a rainy day fund. Play the long game. When you have net worth in the millions, you will be the one selling covered calls for the premium, and not the one buying them with no hope of exercising. By then, you'll be happy with a 0.5% gain per week (25% per year) from just premium and won't even need to check daily.

Smacpats111111

No risk: SGOV (3.6% annually, ties inflation) Low risk: VT (is a bet on the world economy, which I personally wouldn't participate in) Medium risk: SPYM/VOO (bet on America) High risk: SPMO, QQQM (bet on profitability of AI/tech sector) Crazy risk: QLD, SPUU (huge short term bet on tech/America) Genuinely do not do this: TQQQ, SPXL (yoloing everything and you would lose it all in a crash)

Zephyruos

Been waiting for the crash, but sadly when it came, I was either cash poor, money attached elsewhere or not catching it in time. This time I am liquid, will park it in SGOV or something similar till such crash happens, I am planning for most of my portfolio ITM calls as stock substitute with no more than 10% of whole protfolio as OTM for exponential leverage.

Newbiewhitekicks

5-7 years is too short of a time period to be invested in equities. For this time period you’ll want SGOV, treasuries/bonds, CD, or HYSA.

Thermogenic

I prefer USFR to SGOV personally but honestly they are going to behave pretty similarly. In addition to USFR I also hold VCRB, which is Vanguard’s actively managed core bond fund. It holds the bulk of my bond holdings. I have some EMLC (emerging market local currency) as well, but that’s just a small hedge against the near term monetary policy continuing to weaken the dollar.

Certain-Contact6340

SGOV

Ok-Koala8737

I split between BIL and a short term treasury fund just to avoid having everything tied to one issuer's ETF structure. Yield difference versus SGOV has been small enough that it is not worth obsessing over.

Fhyzikz

I sold it all. Just doing SGOV for the rest of the year. Tired of red every day

Putrid_Pollution3455

Short duration like SGOV and USFR, yeah. Long duration? No.

DKeai

I switch between SGOV and TBLL

Severe-Weekend-6664

USFR (floating rate Treasuries) and BIL are worth a look for short, liquid yield comparable to SGOV. TLT is long-duration though, so it swings on rate expectations rather than sitting like cash, which matters for a float strategy.

plurality

Why not just buy SGOV?

Kqzxh-900355

SGOV is the simplest and easiest for me to access when i’m ready to buy stocks or to use as emergency fund. I don’t want to lock my money in a T-bill or CD when an opportunity comes along the way.

DoinIt4DaShorteez

you didn't define "short-term" SGOV is basically the same as a money market fund. look at a price chart of TLT and ask yourself if you want to be in that for the next X months

Zephyruos

SGOV is looking better until then.

Spectre75a

“Hardly any different than an HYSA”, except SGOV’s yield is higher than most non-promotional HYSAs and the tax treatment is better (if your state allows, which most do).

VeterinarianOk7477

Isn't the "safest asset in the world" short term treasuries like SGOV holds? Not TLT which has high interest rate risk?

Electrochemist_2025

Long term ETFs are risky right now. They are already down a lot. No need for too much of variety. SGOV and CSHI or similar should suffice.

YTLupo

Buying YUUUUGE amounts of SGOV come the first

KeyMysterious1845

what are we buying ? SGOV ? BND? Mason jars and shovels ?

Weak_Emu3659

and how is 3.75% better than 5%, inflation disappears if you buy SGOV? moron

Low_Plastic363

SGOV gives you 3.75% with no downside risk. Buying 10y bonds at 5% doesn't do much if inflation runs at 4% for the next decade.

diggida

I hold SGOV, BND, VGIT, and BOXX.

zer1223

SGOV is hardly any different than a HYSA. People who are "investing" in bonds aren't using SGOV. The bond market is extremely complex and I can't speak to it, to be honest. It may be better to buy raw bonds than bond ETFs, it may not be, idk

bobdevnul

VBIL is very similar to SGOV, duration also 0.1 year. Current yield 3.66% VGUS, duration 0.4 years. Current yield 3.83% XHLF, duration 0.46 years. Current yield 3.75% All of the above are Treasury bond funds. Their dividends are all of nearly all state tax exempt which make the effective yield higher if you have state income tax. APLU is an intermediate term bond fund with a duration of 6.3 years. It is not a popular one with info easy to find. It is an actively managed fund so the management expense can cut into the yield. It holds a variety of bond types, government and corporate. With the duration of 6.3 years is has significant interest rate risk. If interest rates go up, as they are expected to, you could be waiting for years for the NAV to not be at a loss which cuts into your total return unless you wait it out. It is in no way equivalent to a short term bond fund like SGOV.

Ok_Challenge_7001

The "flexibility of being an ETF" thing always gets me, everyone buying SGOV treats it like a savings account and checks the price maybe once a quarter. TLT moves double digits on a single CPI print, that is not a cash float, that is a duration bet.

SnS2500

SGOV is a short term treasury \_bill\_ ETF. As such it works as cash with basically no risk. Bond ETFs have large risk. TLT for example is down -13% in price for the past year, so about negative -8.5% for the year. APLU is also a net loser for the year, but not as horrible as TLT. Bad time for bond ETFs. Stick with SGOV or one of the other t-bill ETFs... or possibly a AAA CLO etf like JAAA or PAAA.

therealjerseytom

Depends what you're trying to do. For *short-term*, SGOV is an appropriate choice. TLT holds bonds on the far other extreme of the duration spectrum, and carries significant interest rate risk. That can work for you in a recession/deflationary situation, but it can also really hurt you in a rising yield environment. Short Treasury, long treasury, corporates, municipals, etc. etc. - all have a time and a place and a fit. You have to start with your goals and risk guardrails and find the investment that fits the bill.

BreadPuzzleheaded424

Short answer: the fund's assets aren't the manager's assets. In a US registered ETF the securities are held by a custodian in the fund's name, legally separate from the sponsor's balance sheet, so if BlackRock (or any issuer) went bust, its creditors couldn't touch the fund's holdings. Shareholders would still own their pro rata share of the underlying portfolio. In practice the fund would be transferred to another manager or liquidated, and you'd get the net asset value back. The real risks are second order. Securities lending is the main one: lent securities are covered by collateral, but that collateral is where things can get messy in a stress event. Then there's the authorized participant and market maker chain, which can widen spreads and create temporary discounts to NAV if it seizes up, but that hits price, not ownership. For a Treasury ETF like SGOV the underlying is about as clean as it gets.

OurNewestMember

The easiest thing to say here: achieve cross margining when possible. Basically, if you're net shorting S&P500 directionally, do that with SPX. Opening trades for zero margin. Easy peasy. Tbh, it sounds like many of your trades won't cross margin, but still try (cross margining is when the combined requirement is reduced due to risk offset, not when the requirement is satisfied from something other than cash like from long ETFs). Now, the rest of it. I'm going to assume your cost to fund futures is about zero and not 6%, because that's achievable (details later). With those basics, ES vs SPX. Some questions are mostly margin independent, like if you need physical settlement or American style exercise, it's going to be ES. So we can mostly ignore obvious deal makers/breakers. So the securities account has long marginable ETFs and maybe a short box and some SGOV/BIL/etc (see later). A short S&P500 put is not getting any margin favors from the long ETF. Couple that with higher margin requirement and, "not SPX" is the answer for selling puts here. Short calls (or long puts) we already mentioned indirectly - should be a obvious win with SPX (given the long ETF holdings). What about strangles? Smaller futures margin should dominate here. But consider lifecycle. If you're going to manage aggressively, futures costs and trading hours could matter, etc. So roughly speaking, open trades wherever margin is lowest. You'll use more of that 60% excess liquidity most efficiently by doing net short calls and net long puts with SPX. But "using up" more than the 60% utilization for its own sake (by suffering higher margin requirements) is not necessary because you can (and probably should) take like 1%age point of your excess liquidity and move it to futures, so you can get the lower requirements at negligible extra cost. Which brings us to...funding futures trading should roughly cost zero. The optimal setup for futures is a big box (eg, buy 2000 wide for 1900 debit or whatever, and give it some duration so you're not messing with these constantly). It earns the implied rate and will satisfy your margin requirements. Having it doesn't mean you must trade futures (you'll earn the going rate regardless) If you need cash (you do; you're cash poor, as you're supposed to be), sell a box (I'm assuming you don't want to sell your ETFs and replace them with calls/synthetics). Futures margin deposits should not come from the broker. Also, sell a box, and leave it. You "pay it off" by pumping up your SGOV or something, not crossing the spread a second time and even risking needing to open another box due to shortsightedness. Good funding hygiene helps cover all your trading costs! If your securities account is $300k NLV, then putting $300k notional deposit into your futures account should cost you less than 1%age point of your securities excess liquidity (you'll go from like 60% to maybe 61% utilization). It's achievable to cover a year's worth of trading for like $70 of slippage (which should be "paid for" by 1 or 2 weeks of open futures positions not being secured by USD cash). This is absurdly cheaper than borrowing from even "the best" which will cost you 120+bps (and that's assuming you're borrowing millions from either IBKR or RH Gold, lol). Ie, structure your portfolios in advance so that there's little cash movement for futures (or even opening SPX debit positions). Then you can pick SPX or ES based only on product fit and margin efficiency. There's plenty more on cash management, but that's enough for now. Some scenarios. ##Scenario: Long ETF, sell an S&P500 strangle SPX: $60k requirement can come from the excess liquidity in the ETF. ES: $40k requirement comes out of the excess liquidity in the box (actually you might release like $1k excess cash back to securities, just use SGOV/BIL/etc to soak it up) ES likely the winner due to the lower requirement ##Scenario: long ETF, buy S&P500 OTM put debit calendars (assume cash settlement is okay) SPX: requirement should be about zero (cross margining), and the debit should come from selling leftover SGOV/BIL or whatever you worked up when you sold the big box you need because you're cash poor ES: normal SPAN2 requirement (not bad, but likely not zero) which will be deducted from any excess in your long box. Debit also should come from selling bills, same as for opening the debit SPX position SPX probably the winner due to the negative Deltas nuking the requirement. Most people will not setup their accounts like this, and then cash management becomes a completely avoidable recurring cluster. Boxes could just be managed twice a year (December and January) and then fine tuning with something like SGOV can happen like 12 hours a day with penny wide spreads. Brokers sure fleeced the public on funding futures accounts 😂 So here's the answer: - settlement and assignment characteristics always dominate the SPX vs ES choice - always go for the cross margining in those few applicable cases (SPX short calls, long puts in the securities account). Of course both portfolios will change over time - Get your cash management setup on both securities and futures, so that funding is a non issue for choosing SPX vs ES. Obligatory caveat: technically long options don't generally have a margin requirement, but we can pretend like they do because they will tend to reduce the requirement when you do put on marginable positions (eg, when we say adding net long puts should be done with SPX)

AvailableRun5316

Yeah the borrow costs on SGOV are the hidden knife here. Your broker might quote a low rate today and then jack it up next week because the lendable float shifted. Box spreads lock in the rate for the entire term so there's no surprise re-rates, and the tax treatment on 1256 contracts is cleaner than dealing with dividend payments and potential constructive sale issues.

SaucyOcto

Basically ditto, plus HSA. Beyond that, currently saving for down payment via SGOV (high tax city). Sometimes I throw a few extra grand/year into a taxable brokerage if I have a surplus.

frickin_darn

Deep otm 0 DTE SGOV calls

Nizamshizam_0x378

SGOV

Janubeary

SGOV about to replace JEPI soon LOL

Janubeary

Like many of you I like to diversify my assets to reduce risk and keep 25% in SGOV

BagHoldersOfAmerica

SGOV starting to look real sexy not gonna lie

WhileNotLurking

The to an extent but the degree matters more. I sometimes slow money into the market during a downturn hoping for a bit of a bigger dip. This is timing the market and influence in part by fear of catching a falling knife. But I only reduce inflow by 2-5%. At the other end is my aunt who liquidated her entire 401k out of equities in 2009, and kept them in a cash fund / SGOV equivalent since. She took a huge haircut and refused to go back. It had destroyed her financial ability to retire.

Ladyvp05

So you are saying SGOV and money funds which are based on the fed funds rate don't have a yield?

MediumSpecial308

Currently 20k-30k per month except for months that I have to pay property taxes or income taxes. VTI/VXUS 50-70% ABCL 5% SGOV 10-40% Depending on how much VTI and VXUS I want to buy.