- Investment Management
- Portfolio Financing
Portfolio Financing
Every suitable NinePointTwo client can borrow against their portfolio through S&P 500 index option box spreads, at the rate the options market sets. NinePointTwo adds no spread and earns nothing from the loan.
- Available to all suitable clients
- No spread over the market rate
- No arrangement fee
- S&P 500 index options
What a Box Spread Is
A box spread pairs a call spread with a put spread at the same two strikes and expiration.
Selling one brings in cash today and fixes the amount owed at expiration, whatever the S&P 500 does.
- Call spread
- Put spread
- Both spreads together
Illustration of structure, one contract per option. Each S&P 500 index option carries a $100 multiplier, so a box 1,000 points wide settles at $100,000 at any index level.
How a Three-Month Box Loan Works
Today
+$99,011
Cash received for selling the box
December 18, 2026
−$100,000
Fixed amount owed at expiration
Illustration only. The rate shown is SOFR of 3.88 percent, as published by the Federal Reserve Bank of New York for September 24, 2026, plus the spread set above. Box spread rates generally sit near short-term benchmark rates such as SOFR, with a spread that varies with market conditions. The spread is the market's pricing of the box and not a NinePointTwo charge. NinePointTwo adds none. The rate on an actual box is set when it trades and may be higher or lower than shown. Rates are simple annual rates on a 360-day basis.
Box Spread Financing Compared With a Margin Loan
| Feature | Box spread loan | Broker margin loan |
|---|---|---|
| Typical cost | Typically lower than broker margin rates | Typically higher, as the cost comparison below shows |
| Who has used it | Long used by institutions to borrow cash, and now open to individual accounts | The standard way individual investors borrow against a portfolio |
| How the rate is set | By the options market, where many participants compete to price the box | By the broker, as a base rate plus a markup |
| Rate over the term | Fixed until the box expires | Floating, and the broker can change it |
| Added spread or fee | None from NinePointTwo | Built into the broker's rate |
| Tax treatment of the interest cost | Generally a Section 1256 capital loss, whatever the cash is used for | Deductible only when the loan funds investments |
| Who stands behind it | Exchange-listed options, cleared by the Options Clearing Corporation | The broker |
| Flexibility | Set amounts and expiration dates, with any early exit at the box's market price | Borrow or repay any amount at any time |
| Collateral | Subject to the broker's margin rules, and to forced sales in a market decline | The same margin rules, and the same risk of forced sales |
Typical cost
Box spread loan
Typically lower than broker margin rates
Broker margin loan
Typically higher, as the cost comparison below shows
Who has used it
Box spread loan
Long used by institutions to borrow cash, and now open to individual accounts
Broker margin loan
The standard way individual investors borrow against a portfolio
How the rate is set
Box spread loan
By the options market, where many participants compete to price the box
Broker margin loan
By the broker, as a base rate plus a markup
Rate over the term
Box spread loan
Fixed until the box expires
Broker margin loan
Floating, and the broker can change it
Added spread or fee
Box spread loan
None from NinePointTwo
Broker margin loan
Built into the broker's rate
Tax treatment of the interest cost
Box spread loan
Generally a Section 1256 capital loss, whatever the cash is used for
Broker margin loan
Deductible only when the loan funds investments
Who stands behind it
Box spread loan
Exchange-listed options, cleared by the Options Clearing Corporation
Broker margin loan
The broker
Flexibility
Box spread loan
Set amounts and expiration dates, with any early exit at the box's market price
Broker margin loan
Borrow or repay any amount at any time
Collateral
Box spread loan
Subject to the broker's margin rules, and to forced sales in a market decline
Broker margin loan
The same margin rules, and the same risk of forced sales
The box spread bar uses SOFR plus the spread set in the example above. IBKR Lite charges its benchmark rate plus 2.50 percent at every balance, 6.38 percent in September 2026. Schwab and Fidelity both publish 10.325 percent for debit balances of $250,000 to $499,999, each against a base rate last changed September 18, 2026. Broker rates float, while a box rate is fixed for its term. The after-tax figure assumes the capital loss offsets capital gains at the top federal rates, 23.8 percent long-term and 40.8 percent short-term, split 60/40, and ignores state tax. The broker bars are shown before tax. Margin interest is deductible only as investment interest, by taxpayers who itemize, up to their net investment income, and only when the loan funds taxable investments, so its after-tax cost varies too much by client to show one figure. Every rate shown changes over time. Sources are listed at the end of the page.
See what a box spread loan would cost on your portfolio.
We walk through current rates for the amount and term you have in mind.
How the Borrowing Cost Is Taxed
S&P 500 index options are Section 1256 contracts. The borrowing cost built into a box is generally treated as a capital loss, 60 percent long-term and 40 percent short-term, however the cash is used. Margin interest is deductible only as investment interest. Clients should confirm the treatment with a tax adviser.
What Clients Should Weigh
- 01
Collateral
The account must hold enough collateral under the broker's margin rules. A market decline can force the sale of holdings, as with any margin loan.
- 02
Rolling
Each box has a fixed expiration. A longer loan rolls at the rate on the roll date, which may be higher. Closing early means buying the box back at market.
- 03
Pricing
Each box is priced in the market when it trades. NinePointTwo does not guarantee any particular rate.
Common Questions
Who is lending the money?
The lender is whoever buys the box. Box spreads trade on Cboe, and the Options Clearing Corporation clears every trade and stands between the two sides.
Can the options be exercised early?
No. S&P 500 index options are European-style, so they can be exercised only at expiration, and they settle in cash.
How long can a loan run?
Listed S&P 500 index options run from days to several years. Most loans use expirations between a few months and a few years and are rolled as needed.
Rates and tax rules on this page are drawn from the public materials below. Each entry lists the date it was last checked.
- 1.Federal Reserve Bank of New York, Secured Overnight Financing Rate (SOFR), 3.88 percent as published for September 24, 2026. The page shows the latest published rate. newyorkfed.org
- 2.Interactive Brokers, margin rates for IBKR Lite accounts, which charge the benchmark rate plus 2.50 percent on USD balances. The USD benchmark was 3.88 percent. Checked September 2026. interactivebrokers.com
- 3.Fidelity Investments, margin rates, 10.325 percent for debit balances of $250,000 to $499,999, which is 0.500 percent below a base rate of 10.825 percent effective September 18, 2026. Checked September 2026. fidelity.com
- 4.Charles Schwab, margin rates, 10.325 percent for debit balances of $250,000 to $499,999.99, a base rate of 10.25 percent plus 0.075 percent, last changed September 18, 2026. Checked September 2026. schwab.com
- 5.Internal Revenue Service, Publication 550, on the 60/40 treatment of Section 1256 contracts and the limits on deducting investment interest. Federal rates used are 23.8 percent long-term and 40.8 percent short-term, including the 3.8 percent net investment income tax. Checked September 2026. irs.gov
Borrowing against a portfolio involves substantial risk, including the risk that a decline in the account's value forces the sale of holdings. Options involve risk and are not suitable for all investors. Before trading options, investors should read Characteristics and Risks of Standardized Options. Box spread rates are set by the market and are not guaranteed. The tax treatment described is general and depends on individual circumstances, and nothing on this page is tax advice. See our Disclosures page for additional important information.
Discuss a Financing Need
Tell us the amount and term you have in mind. We will walk through current rates, how the loan sits in your account, and the cost against your margin rate.