Everything you need to know about box-spread lending, onboarding, and ongoing support.
What exactly is a Spreadwise loan?
SpreadWise loans are created using a box spread — a structured combination of index options that functions like a fixed-rate, zero-coupon loan. It’s a synthetic borrowing tool backed by institutional liquidity and cleared by the OCC.
Who is the ideal client for Spreadwise?
High-net-worth individuals, business owners, family offices, and clients with concentrated stock positions who need liquidity without triggering capital gains.
Why are Spreadwise's borrowing rates so low?
Box spreads are executed in one of the most liquid markets in the world — S&P 500 index options — where institutional lenders compete, driving borrowing costs close to risk-free rates.
Are my clients’ assets safe and do they need to transfer them?
Asset transfers are not required. Clients’ assets stay at their current custodian (e.g., Schwab, Fidelity), and SpreadWise integrates directly to facilitate the strategy.
Will this affect my client’s credit?
No. There’s no credit check, no reporting to credit bureaus, and the borrowing is fully collateralized by the investment portfolio.
How fast can clients receive funds?
Once approved and the strategy is executed, funds are typically delivered to the client’s account the next business day.
How much can a client borrow?
Depending on portfolio composition, clients may borrow up to: – at least 50% of equities – at least 70% of bonds (with portfolio margin) – at least 90% of Treasuries (with portfolio margin)
What are the risks?
While early exercise and forced liquidation aren’t a concern (due to European-style options), risks include market illiquidity during rare events and interest rate sensitivity on longer-term loans.
Can clients still trade while using SpreadWise?
Yes. Clients maintain full trading access to their accounts, including those used for collateral.
What fees does SpreadWise charge?
A flat 0.60% annual fee (billed monthly) on the borrowed amount.
What happens if the value of my client’s portfolio declines?
As with any collateralized loan, a decline in portfolio value may trigger a margin call. In such cases, clients may be asked to post additional collateral or reduce their loan balance to maintain adequate coverage.
Why haven’t I heard of Spreadwise or box spread borrowing before?
Box spread borrowing has long been used by institutional traders on exchange floors like the CBOE, typically for transactions in the tens of millions range. Spreadwise is among the first to deliver this powerful institutional strategy to retail and high-net-worth clients through a software-based platform.
What happens if interest rates rise after the loan is issued?
Clients using fixed rate loans are unaffected by rate changes during the term. However, for floating rate loans, future borrowings may be impacted by market rate movements. The box spread's implied interest adjusts to market demand at the time of borrowing.
Should my client choose a fixed or floating rate option?
Floating Rate: Ideal for flexible, on-demand access to funds. It functions like a revolving line of credit. Fixed Rate: Better suited for clients with known capital needs or fixed time horizons, such as real estate purchases or planned business investments.
What is the fixed rate product?
This product allows clients to lock in a borrowing rate for a defined term (1 month to 5 years). At the end of the term, the full principal and interest are due in a balloon payment. Clients can choose to refinance into a new fixed-term loan or transition to a line of credit.
How does the line of credit product work?
Clients can borrow and repay at any time. Although monthly interest payments are encouraged, they are not mandatory. Any unpaid interest will be capitalized (added to the loan balance).
Can clients pay back the loan early?
Yes- subject to interest rate change.
What can clients use the funds for?
There are no restrictions on the use of proceeds. Funds can be used for any personal or business purpose.
Can retirement accounts participate?
No. Spreadwise loans are only available for taxable brokerage accounts. Retirement accounts (IRAs, 401(k)s, etc.) are not eligible.
Is Spreadwise a lender?
Spreadwise is not a direct lender. We are a registered investment advisor that facilitates access to institutional borrowing by implementing synthetic loan strategies using exchange-traded box spreads.
How is this different from a margin loan?
Margin loans are issued by brokers with fluctuating interest rates, potential for forced liquidation, and limited transparency. Spreadwise uses synthetic borrowing through the options market, providing fixed repayment, lower costs, and clear terms.
How is this different from a traditional securities-backed line of credit (SBLOC)?
While both Spreadwise and SBLOCs allow clients to borrow against their investment portfolios, they differ in structure and cost. SBLOCs are issued by banks or custodians and typically come with variable interest rates that can change over time, limited transparency on pricing, and potential custodial restrictions. In contrast, Spreadwise uses exchange-traded box spreads to synthetically create a loan with fixed or market-driven rates that are almost always more competitive.
What is the minimum loan amount?
The minimum loan size for a Spreadwise solution is $10,000.
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