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Options Theory: How to Buy T-Bills via Treasury Direct

October 13, 2022

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Today’s video shows how to buy Treasury Bills from the Government via Treasury Direct.

Notes

  • T-bill: Par value is $100
  • Buy for $99.80
  • Bank account is debited $99.80 at the auction
  • When bill matures, your bank account is credited $100.
  • 20 cents was the interest. Annualize that, it should be around 3.5%
  • High yield savings account: 2.25% – Immediate liquidity

OR

  • Buy 3-month T-bill for 3.5% – Illiquid for 3 months.
  • Don’t put all your money in a 3-month T-bill all at once.
  • Every week put in 1/12th of the money and then by the 12th week, you’ve bought 12 different T-bills that expire every week from here on out. Every week 1/12th of your money becomes liquid: LADDERING into T-bills

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