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SPX Box Spreads: Borrow or lend with Competitive rates using the Options Market
Expand Your trading strategies with SPX Box Spreads
The SPX Options market is one of the most liquid in the world, with an average daily volume of 3.63 million contracts in 2025. To help more traders access this liquidity, Cboe is making SPX Box Spreads options strategies, more accessible to a wider range of traders. SPX Box Spreads offer traders an opportunity to use options to effectively lend or borrow money, often at more attractive rates than traditional alternatives.
What is a Box Spread?
A Box Spread is an options strategy that involves four positions: buying a call and selling a put at one strike price, while selling a call and buying a put at a different strike price, all with the same expiration date. The strategy functions similarly to a bond, with its final value determined at expiry. The cost of a Box Spread reflects the difference between strike prices, discounted back at a risk-free rate, allowing traders to infer an implied yield, similar to a zero-coupon bond. Box Spreads using SPX Options provide access to a highly liquid market, with European-style, cash-settled options, which eliminates the risk of early exercise and adds convenience of cash settlement for traders.
Where is the liquidity?
Cboe is the leading market for SPX Box Spreads in the US.
+20
floor brokers+24
market makers$1.2B
average daily notional$100k
median traded loan notional92%
with 1000 strike distance79%
contracts expiring within 6 months65%
use 5000/6000 strikes*Source: Cboe
*In 2025, the 5000/6000 Box Spread surpassed the 4000/5000 Box Spread to become the most electronically traded Box Spread by notional value.
Want to learn more about SPX Box Spreads?
Lend above T-Bill Rate:
The effective lending rate created by using SPX Box Spreads may be more attractive than U.S. Treasuries. The effective rate for SPX Box Spreads has ranged from 6 to 44 basis points higher than 3-month Treasuries in the first half of 2025, potentially making it a strategy for investors to earn returns on extra cash.
Borrow below broker rates:
From a borrowing perspective, effective borrowing rates from SPX Box Spreads are typically lower than broker rates. In June 2025, median broker rates were 10.950%**, while effective rate for SPX Box Spreads were 4.19%.***
For a loan size of $100,000, brokers usually offer a rate between 8.75% and 11.075% as shown in Table 1.
Lending Rates
T-bill + 0.10-0.55%
Borrowing Rates
3.00-6.00%
Below standard broker's margin rate
** Median broker rate for top 5 brokers in US assuming a 100k loan size notional on 6/23/2025
*** Median effective rate from SPX Box Spreads traded in June 2025, as of 6/23/2025
Competitive Lending: SPX Box Spreads vs. U.S. Treasuries and SOFR
For 3-month expiries, SPX Box Spreads have typically outperformed US Treasuries. Throughout 2025, SPX Box Spreads consistently traded at an average premium of approximately 26 basis points over 3-month US Treasuries. This return is supported by options market competition among participants, which may drive prices down and make SPX Box Spreads a compelling alternative to traditional money market funds.
Comparison of 3-month rate from U.S. Treasuries and Term SOFR against Box Spread
Source: Bloomberg, Cboe, and the Federal Reserve Bank of St. Louis
Competitive Borrowing: An Attractive Alternative to Margin Loans
The comparison below shows that borrowing cash using SPX Box Spreads may offer significantly lower rates than traditional margin loans from brokers. In contrast to broker rates, which can range from 5.83% to 11.075%, SPX Box Spreads can provide borrowing at an effective rate lower than 6%. This can present a more cost-effective way to access cash, making SPX Box Spreads an attractive choice for borrowers seeking better terms than those offered by brokers.
Margin Loan Rate ($100K) |
||
Broker 1 |
11.075% |
|
Broker 2 |
11.075% |
|
Broker 3 |
10.95% |
|
Broker 4 |
8.75% |
|
Broker 5 |
5.83% |
Margin Loan Rate ($100K) |
|
|---|---|
Broker 1 |
11.75% |
Broker 2 |
11.75% |
Broker 3 |
10.95% |
Broker 4 |
8.75% |
Broker 5 |
5.83% |
Table 1: Broker's margin loan rate for top 5 brokers in the US assuming a $100,000 loan size notional, on 6/23/2025
Exploring the Term Structure
Beyond 3-month expiries, it's important to understand the broader term structure of SPX Box Spreads. Investors can better understand how potential effective return rates vary over time by analyzing different expiries -- including long-term options expiring up to five years out.
The term structure analysis reveals how market conditions and expiry dates influence borrowing and lending opportunities, offering valuable insights for investors looking to leverage SPX Box Spreads across various maturities for strategic financial management.
SPX Box Spread Term Structure on December 6th, 2024
Source: Cboe
Use Cases: Real-World Applications
Case Study 1: Lending Excess Cash
A Swiss volatility arbitrage hedge fund holds $700 million in excess cash from the capital efficiency of their volatility strategies. Due to leverage limits and risk appetite constraints, they prefer not to deploy this capital for additional trading.
Solution:
The fund invests in SPX Box Spreads to generate additional returns. Since they already engage in daily options trading, integrating Box Spreads is straightforward. The fund specifies the notional amount, target rate and time horizon. Operationally, managing SPX Box Spreads trades is simpler than purchasing treasuries, as the fund can monitor the profit, loss and risk of the loan through their existing options risk management systems.
Case Study 2: Efficient Borrowing
A systematic trading firm seeks to increase trading leverage and needs to borrow funds. While holding substantial collateral, they face an 11% margin loan rate from their broker.
Solution:
Since the firm is active in the options market, they choose to borrow by selling SPX Box Spreads. This strategy provides better rates than the broker's offer, with borrowed funds available in their account within days of executing the trade.
Why choose box spreads?
Market Leadership
Cboe is the leading market for options SPX Box Spreads in the U.S.
Superior Rates
Competitive lending and borrowing rates compared to traditional alternatives
Operational Efficiency
Integration with existing options trading and risk management systems
Flexibility
Multiple expiries and strike combinations to match specific needs
Liquidity
Deep, active market typically providing efficient execution
All data are as of June 23, 2025, unless stated otherwise.
There are important risks associated with transacting in any of the Cboe Company products discussed here. Before engaging in any transactions in those products, it is important for market participants to carefully review the disclosures and disclaimers contained at: https://www.cboe.com/us_disclaimers/. These products are complex and are suitable only for sophisticated market participants. In certain jurisdictions, Cboe Company products are only permitted for investment professionals, certified sophisticated investors, or high net worth corporations and associations. These products involve the risk of loss, which can be substantial and, depending on the type of product, can exceed the amount of money deposited in establishing the position. Market participants should put at risk only funds that they can afford to lose without affecting their lifestyle. © 2026 Cboe Exchange, Inc. All Rights Reserved.