TFLO - TFLO And USFR: Derivatives Trader Essentials

2024-01-30 12:23:29 ET

Summary

• iShares Treasury Floating Rate Bond ETF and WisdomTree Floating Rate Treasury Fund ETF are stable ETFs that pay monthly dividends sourced from floating rate U.S. treasuries.
• These funds are essential for traders to be aware of as they offer a way to earn compound interest on cash positions.
• TFLO and USFR provide stable collateral for derivatives traders and can be used as a way to wait for a market pullback or raise cash before a crash.

Being an active derivatives trader often means that you keep a sufficiently large cash position. Trading P&L changes the size of this cash pile and ideally this pile grows over time. I trade options quite frequently and have been keeping my cash pile in short term bond funds so they also compound....

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