SyntheticFi uses an options strategy called "box spreads" to help you pay less on margin.

This strategy gives upfront cash to the user, and requires repayment later with interest. The interest rate on "box spreads" is much lower than the margin interest rate advertised by the brokerage firms.

SyntheticFi trades "box spreads" on your behalf to borrow upfront cash and repay any margin debit balance in the user's account. Because the interest rate on "box spreads" is much lower, SyntheticFi can reduce the cost of borrowing for you.

Read more about box spreads here.

SyntheticFi uses "box spreads" constructed from listed SPX index options to borrow money. When it sells a "box spreads" combo to get upfront cash, the market counterparty buys a "box spreads" combo and act as the lender. It works just like buying and selling stocks.

Major lenders in the "box spread" market include options market makers, and the BOXX ETF (which has $3B asset under management).

SyntheticFi exclusively trades exchange-listed SPX index options. These options are European-style, which means they cannot be early exercised. When the expiration date of these options is near, we will help you roll the options to extend the expiration date.

SyntheticFi is NOT offering low rates as a promotion strategy so it does not expire.

We deliver the low margin rate because it uses "box spreads" strategy, which has a much lower cost of borrowing. The rate generally moves with short-term Treasury yields. We send email alerts when there is significant changes to the  interest rate.

SyntheticFi uses an options strategy called "box spreads" to facilitate the borrowing. The interest expense on this strategy is charged as a trading loss on listed index options. Therefore, they are treated as capital losses for tax purposes.

To use SyntheticFi, you must have an existing taxable (non-retirement) brokerage account with margin and options trading access. To borrow using margin, you must have at least $2,000 in your account.

Your brokerage firm and SyntheticFi may apply additional screening to ensure suitability of the investments.

Our chrome extension is available free of charge. However, you can engage SyntheticFi for a fully managed service that operates box spreads and manages cash for you.

SyntheticFi is a robo investment advisor that connects to your existing brokerage account. It manage the "box spreads" options contract for you based on your preferences. SyntheticFi is not authorized to make any changes to your existing investments. You will manage them and place trades by yourself.

Specifically, a few actions it will do includes opening positions when you take out a margin loan, rolling positions if existing box spread options are about to expire, and adjusting or closing positions when your margin debit balance changes.

All you need to do it to use a Chrome extension. You don't ever need to give us your login credentials. Our access to your account is only active when you activates our Chrome extension while logging into your brokerage account using Chrome.

Using SyntheticFi does not change the margin maintenance requirement of your brokerage firm. You should be able to borrow the same amount as you could without SyntheticFi.

In general, you are allowed to borrow up to 50% of your investments based on Regulation T. Refer to your brokerage firm to get more details: any margin calls will issued by your brokerage firm.

All standard risks from using margin loans still apply.

Because SyntheticFi uses box spread options to reduce the cost of borrowing, there are additional risks that you should be aware of:
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- Interest-rate risk: if interest rate drops, the box spread options combo may reduce in value. You are exposed to this risk ONLY when you wish to pay off your box spread before its expiration date. This risk is comparable to investing in short-term fixed income such as U.S. Treasuries.
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- Execution risk: the risk arises from the possibility of difficulty in finding counterparties to execute trades. If SyntheticFi cannot find a counterparty to execute your trade, you may need to take out a margin loan instead, and pay margin interests.

Notably, SyntheticFi uses European-style index options to avoid early exercise / assignment risks.