Box Spread Financing in Germany, 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 Germany it works like this:
- The cost counts against your capital income. What you pay for the loan shows up as a loss on the options. Since the Jahressteuergesetz 2024, that loss is no longer ring-fenced to other derivatives: it is offset against dividends, interest, fund income and gains from selling shares. The saving is the flat 26.375% capital income tax, or about 28% with church tax. No capital income that year? The loss carries forward.
- It is taxed leg by leg. The premiums you receive when you open the box are taxable income. The payment at expiry is a loss. Only both together equal your financing cost.
- Watch the calendar. If the box runs past 31 December, the premiums are taxed in the year you open it and the loss only arrives in the year it expires. The saving still comes, but possibly a year later, so plan the cash for it.
- A foreign broker won't do it for you. Interactive Brokers doesn't withhold German tax or offset losses, so you declare everything in Anlage KAP of your tax return.
This is how the law reads today, not tax advice. Check your own situation with a Steuerberater.
Sources
- § 20 EStG: option premiums (Abs. 1 Nr. 11), Termingeschäfte (Abs. 2 Satz 1 Nr. 3), loss offsetting (Abs. 6)
- Jahressteuergesetz 2024, BGBl. 2024 I Nr. 387, Art. 3 Nr. 7: repeal of § 20 Abs. 6 Sätze 5 and 6 EStG
- § 52 Abs. 28 EStG: the repeal applies to all open cases
- BMF-Schreiben of 14 May 2025, Einzelfragen zur Abgeltungsteuer: Rz. 25–35 (options and combination trades), Rz. 118 (loss offsetting)
- BFH, 20 October 2016, VIII R 55/13: a cash settlement paid by the option writer is a loss
- § 32d EStG (25% flat tax) and § 4 SolZG (5.5% solidarity surcharge)