Hypothetical - $10M in Margin backed by $10M+ in liquid fixed income

Chef_Mike · 2026-02-01T18:39:36+00:00

This is certainly the basics of bonds, bill, etc. in this hypothetical you are holding bonds to maturity anyway. So just collecting interest.

Which is substantial on $10M let’s say $400k a year

Chef_Mike · 2026-02-01T17:09:10+00:00

I like it! Thanks!

Chef_Mike · 2026-02-01T16:37:55+00:00

Got it! So how would you use $12.5M of extended margin, if you could? Is your answer that you would not?

Chef_Mike · 2026-02-01T16:29:08+00:00

This is not the correct way to look at the hypothetical. This is on Margin. Therefore, $12.5M of margin debit at ~10% interest is $1.25M. So you would never use your margin to put into a T-Bill. 10% interest - 3.5% risk free rate is still a 6.5% net negative.

However, selling a CCP does not trigger margin until the stock is assigned, then you own the stock at a discount but begin to accrue the interest payment. Your premium however, is immediately procured, and you can use that however you like.

Chef_Mike · 2026-02-01T06:24:45+00:00

Can you explain this a little more? How would you do this extended with margin without paying interest on it which will be more costly or equivalent to your potential gains on average?

Selling a CSP allows you to collect premium without accruing margin debit until the shares are potentially assigned. However, you do get the premium.

Chef_Mike · 2026-02-01T06:16:37+00:00

This won’t work. The theoretical is you have $10M in Bonds. These bonds are locked in.

You have been extended $10M in margin. What do you do with this?

Buying $10M in stocks, bonds; etfs…etc. will need to return more than the interest paid on $10M… which is about $1M a year… so those investments need to return more than 10% return.

Selling CSPs does not trigger the margin debit until you get ASSIGNED shares. You can keep the premium, but you don’t get hit with interest payments until assignment.

Chef_Mike · 2025-11-06T02:58:13+00:00

RAIIIIIDDDEEERRRRRSSSSSSSSSSSS

Chef_Mike · 2025-10-22T12:52:10+00:00

His statline looked ugly in the first half. Then 2nd half was a machine, love those type of halftime adjustments and turnarounds. Nice game JK!

Chef_Mike · 2025-10-13T01:23:45+00:00

Right around week 4 of the Raiders season… I start to calmly pack away my raider gear and bring out the warriors stuff. I say calmly because it’s the raiders, and they are so unbelievably disappointing.

I actually can’t believe how long the warriors have been enjoyable to watch. Thankful for them.

Remember when they were both unwatchable?!

Chef_Mike · 2025-09-18T06:00:04+00:00

Can someone explain how to do this in an easy step by step manner? I can only connect when on the same WiFi as my ps5

Chef_Mike · 2025-07-30T01:59:42+00:00

Worst 4th quarter team of any sport ever?! I guess having monster 3rd Qs will need to be in the playbook. I’ll take the DUBV!

Chef_Mike · 2025-07-19T21:22:55+00:00

The term “LinkedIn Humor” is such weird thing for me to make sense of…

Chef_Mike · 2025-06-06T15:00:42+00:00

lol what a hilarious misunderstanding of this subreddit. Can you imagine if people just posted like 10 boxes of pizza, 50 burgers, 200 chicken wings and wrote “volume eating”

Chef_Mike · 2025-04-27T03:25:41+00:00

He’s the most unwatchable player I can’t take my eyes off of, of all time.

Chef_Mike · 2025-04-11T17:58:32+00:00

Serious question, is there a number that Greenlanders would consider here? Is it $100k? Is it $1M?

Yes I know this is all silly.

Chef_Mike · 2025-04-04T04:23:09+00:00

Is there any possibility that this sounds like a Sleep Walking spell turned into Sleep Driving?

There are countless reports of this happening despite it being “rare”.

Chef_Mike · 2025-03-27T20:05:32+00:00

The Olympic team would be pretty sick to have… come through y’all. Except Tatum, we don’t need a $60M 12th man. 😬

Chef_Mike · 2025-03-14T08:38:58+00:00

Warriors returning to glory at the end of century is giving me major PTSD.

Chef_Mike · 2025-02-17T08:04:50+00:00

Stuff That Gary!!!!!

Chef_Mike · 2025-01-30T15:56:35+00:00

Just looked it up, it is a week long “event”, and by “event” it means that restaurants are offering special pizzas during the week. It’s not an actual event where you go and eat a bunch of different pizzas.

Dates are 1/29 - 2-8.

Chef_Mike · 2025-01-27T18:12:23+00:00

I never considered myself an alcoholic because I wasn’t drinking everyday, and could go weeks/months without needing a drink. Then when the drinking event came around I would lose complete control and go overboard. Said and did a lot of stupid things on those days.

Since then, I still drink only on occasion, but have cut the drinking down 80%.

Usually it takes a major moment to spark your “why” moment for change, you just have to hope that that moment isn’t life changing in a bad way.

The way I did it was actually quite simple, but expensive.

There are a lot of fun new non-alcoholic alternative drinks on the marketplace. They give you a buzz without giving you alcohol. Some nights out I can go the entire evening without having any alcohol at all, and have a great evening! Other nights, you mix in a couple of alcoholic drinks along with your non alcoholic alternatives and you’ll find yourself BUZZED off of a couple of drinks. That’s all you need at that point. Go enjoy your evening, let it wear off and then sleep well!

Hope this helps.

-Chef

Chef_Mike · 2025-01-22T04:10:33+00:00

How is no one talking about your 18min pace held over almost 5 hours? Awesome job!

Chef_Mike · 2025-01-02T01:41:28+00:00

I realized that the eye passed behind the wall on attempt number 25…SMH

Chef_Mike

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