Box Spread Financing in France, Explained Simply
Box spread financing means borrowing. Not from your bank, but from the options market, against the portfolio you already hold.
How does it work?
Options are financial instruments you can buy or sell on the open market. With the right combination of four of them you get a synthetic loan: cash in your account today, and a fixed amount to pay back on a set date.
There are plenty of resources online, and we have an in-depth, step-by-step guide if you want the mechanics.
Why the rate is low
You are funding yourself at very low rates because of how these instruments are priced. The market sets the price, close to what large institutions pay to borrow, without a bank's lending margin on top. You can see today's rates on our daily curve.
No market risk, if done correctly
If done correctly, a box spread is immune to market movements. Whatever the index does, you know in advance how much you will pay back at expiry.
Done correctly means European-style, cash-settled index options such as the S&P 500 (SPX) or the Euro Stoxx 50, all four legs placed as one order, and enough margin headroom. The box itself doesn't move with the market, but your other positions can still trigger a margin call.
Taxes: every country is different
Each country treats this differently. In France it works like this:
- It needs an ordinary securities account. A box spread is a forward financial instrument (instrument financier à terme), held in a compte-titres ordinaire. A PEA can't hold it.
- The cost is a capital loss, but a narrow one. It offsets capital gains of the same kind: gains from selling securities and from forward financial instruments, in the same year or carried forward for 10 years. It does not offset dividends, interest or your other income.
- The saving is the flat tax. In 2026 that is 31.4%: 12.8% income tax plus 18.6% social contributions. If you opt for the progressive scale, your marginal rate replaces the 12.8%.
- So you need gains to use it. Without realised capital gains, the loss waits in carryforward and saves nothing yet.
This is how the law reads today, not tax advice. Check your own situation with a tax adviser. Our French tax page has a calculator.
Sources
- Code général des impôts, art. 150 ter: gains and losses on forward financial instruments
- Code général des impôts, art. 150-0 D: offsetting against gains of the same kind and 10-year carryforward
- Code général des impôts, art. 200 A: the flat tax (PFU) on capital income
- Loi de financement de la sécurité sociale pour 2026: social contributions on capital income raised to 18.6%