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Learning, Sharing, and Teaching => Investor Alley => Topic started by: nalor511 on August 01, 2021, 01:42:08 PM

Title: Anyone understand box spread (as a loan) and could write steps for Schwab/Fido?
Post by: nalor511 on August 01, 2021, 01:42:08 PM

I've been reading about box spreads as cheap(er than margin, even at IB) loans, but I don't want to transfer to IB. Does anyone understand them well enough to write a quick how-to at another broker, like Schwab? Or Fidelity?

Those two places have much higher default margin rates, of course, so box spreads (if possible) would be a good way to sidestep that

Thanks!

Title: Re: Anyone understand box spread (as a loan) and could write steps for Schwab/Fido?
Post by: ChpBstrd on August 04, 2021, 08:13:02 AM

I’ve never successfully executed a box, though I’ve tried a couple of times. OptionAlpha has some good content on unusual strategies such as these.
 
 https://optionalpha.com/podcast/box-spread-basics-options-traders (https://optionalpha.com/podcast/box-spread-basics-options-traders)
 https://optionalpha.com/strategies/short-box-spread (https://optionalpha.com/strategies/short-box-spread)
 https://optionalpha.com/strategies/long-box-spread (https://optionalpha.com/strategies/long-box-spread)

You will probably have to execute the trade in separate parts, rather than as a package. This could have margin implications if your broker’s software does not recognize the offsetting risks of the overall strategy. Give customer service a call to discuss this before making a trade.