How to get the risk free rate on idle cash?

A

andrew black

I am looking for suggestions about how to get the risk free interest rate on cash sitting idle in my brokerage account (IB). Interested in a short term solution, no longer than 30 days.

My definition for "risk free interest rate" would be Fed Funds Rate, 2.5% as of today.

I am aware of the put–call parity strategy https://en.wikipedia.org/wiki/Put–call_parity ans also that IB pays about 1.7% interest for $100k balance.


TIA.
 
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Buying the 1 month t-bills seems like the simplest strategy. IB actually pays 1.9% and you only need a $10k balance to receive interest. In the past, I have been able to slightly beat the benchmark rate by buying some integer multiple of 100 shares of SPY, selling a call and buying a put going at least a few weeks out. I think I documented that strategy somewhere on here. To get that might require that the VIX be lower than it is now. I think I was doing the strategy when the VIX was around 12 or 13.
 
ET180 said:
Buying the 1 month t-bills seems like the simplest strategy. IB actually pays 1.9% and you only need a $10k balance to receive interest.
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You only get 1.9% for the amount above the $10k threshold and 0% for the first $10k. That is why is 1.7% for $100k.
 
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