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MooTradition: My Christmas Wishlist for 2023
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doctorpot1 joined discussion · Dec 20, 2022 05:09

Option traders' cash is as good as Stock traders' cash. Please help us to improve Cash Plus and SmartSave for all traders

Please improve Cash Plus and SmartSave for us options trader In the earlier post, where I talked about how an option trader can use Money Market Funds (MMF) like $Fullerton SGD Cash Fund (SG9999005961.MF)$ and $CSOP USD Money Market Fund (SGXZ96797238.MF)$ to gain extra yield of up to 5% instead of letting the money sit idling. This is amazing as that is an extra $500 annually, for every $10k locked collateral, but the current system only allows us to put about 50% of the locked collateral into MMF. Thus we are "losing" $250 for every $10k locked collateral.
doctorpot1: Money Market Funds is like a flexible T-Bill for investors, and "hack" for options trader
For stock trader, they can treat 99% of the money in MMF as though they are cash if SmartSave is activated.
Option traders' cash is as good as Stock traders' cash. Please help us to improve Cash Plus and SmartSave for all traders
Sadly for options trader, currently we can't put 99% of the money locked up as options collateral into the MMF. Only about 50% can be used. It is like option traders' money is not as good as a stock traders' money So hopefully, Moo Moo can increase that closer to 99% so that we options trader don't feel like the unwanted child
For example, in the post above where I'm doing long term Cash Secured PUT in $Grab Holdings (GRAB.US)$. The PUT will expires 1 year, and the cash collateral that is put into it is USD$5,000. Due to the margin calculation, only about USD$2,500 can be placed into $CSOP USD Money Market Fund (SGXZ96797238.MF)$ that is earning 3.6%, and the other USD$2,500 is just sitting idle collecting dust for 1 year. The $5,000 could have been earning about $180 in totality, but now it is only earning an extra $90.
Hopefully for all future cash plus benefit, options and futures trader could be considered too so that we can benefit and use MMF more and more
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more
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doctorpot1
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crawled out of poverty, working towards FIRE!! (financial independence, retired early)
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