What are box spreads?
Box spreads are mechanisms used to lend or borrow money at favourable fixed rates using the options market.
The rates offered by box spreads are not only better than what’s offered by banks and comparable to Treasury bills, but also fixed until the end of the term.
Currently (Aug 20, 2026) Box spreads are trading at a 4.5% annual rate for a 1 year term. For example, say you want to lend/borrow about $100k, this means you’d lend/borrow about $95.7k in order to receive/pay back $100k in one year. The difference of $4.3k between now and then is effectively the rate of the loan and is 1guaranteed not to change unlike regular interest rates due to the underlying options characteristics.
1The margin requirement might suddenly spike because of mark-to-market noise tracking SOFR. What is actually owed is fixed and only settles at expiry, so the number that matters won't change.