Best way to add income on futures trading

[lasner]

Anyone have any suggestions to add income on your futures trading account. What I normally do is purchase notes and then trade against the note....but they yield nothing as of now.

Just wondering if anyone had any creative suggestions

 

[gkishot]

Don't the notes take up the margin so there is less margin left for trading futures?

 

[el pollo]

Quote from gkishot:

Don't the notes take up the margin so there is less margin left for trading futures?

You get 95% of the face value as a performance bond, remember you paid CASH for the bond.

What am I missing here?

 

[gkishot]

Quote from el pollo:

You get 95% of the face value as a performance bond, remember you paid CASH for the bond.

What am I missing here?

Answering to OP question even if a broker takes notes as a collateral to trade futures it won't take anything else so it will take up your cash for margin. So you can trade less futures contracts than with the actual cash ( or possibly notes) in your account.

 

[el pollo]

If I have a $25K T-Bill in my futures account, purchased at a discount, that matures at $25K, my broker gives me $23,750 futures buying power.

No Broker gives you the full face value of the T-Bill in buying power.

 

[gkishot]

Quote from el pollo:

If I have a $25K T-Bill in my futures account, purchased at a discount, that matures at $25K, my broker gives me $23,750 futures buying power.

No Broker gives you the full face value of the T-Bill in buying power.

Ok, what other alternatives of income do you have besides of T-bills as stated in the original post without losing your buying power? None. Check with you broker.

 

[CPTrader]

Any ideas on this - how to gain income on futures trading accounts or general cash management strategies to gain some "yield" on futures trading accounts?

Thanks.

 

[nazzdack]

Quote from lasner:
----add income on your futures trading account.
----purchase notes and then trade against the note....
----any creative suggestions.

1) The CME supposedly allows gold to be used as margin collateral. Would you want to "trade against' that type of position?
2) Would you be willing to short-sell, out-of-the-money credit-spreads as a way of collecting some option premium dollars? Does that qualify as additional income for a trading account?
3) Would you be willing to do naked-writing of at-the-money options on their last trading day? :eek:

 

[bone]

"2) Would you be willing to short-sell, out-of-the-money credit-spreads as a way of collecting some option premium dollars? Does that qualify as additional income for a trading account?
3) Would you be willing to do naked-writing of at-the-money options on their last trading day?"

That is one hell of a jump in risk from collecting T-Note yield. Item 2 is not delta-neutral and will require margin collateral.

BTW, you don't want to sell the last day for option premium in lieu of short-covering, you want to sell a 'teen-ager'. And that is certainly not a 'risk free rate of return' either.

It really is up to your FCM and not up to you in any event. Kinda fruitless discussion otherwise. You can write a bunch of option spreads but they don't perform and slippage is an issue - no free money on delta convergence; these markets are way too efficient.

 

[nazzdack]

Quote from bone:
----That is one hell of a jump in risk from collecting T-Note yield.
----Item 2 is not delta-neutral and will require margin collateral.
----you want to sell a 'teen-ager'. And that is certainly not a 'risk free rate of return' either.
----You can write a bunch of option spreads but....
----markets are way too efficient.

1) Uh huh. The treasuries are exhibiting more downside potential recently greater than their current yield too.
2) Everybody knows the drawbacks of any strategy. What may be uncomfortable for some can be work-able for him.