How low of an interest rate can you get with your bank, or broker?
Can you get rates below 5% for the purposes of borrowing without any extra fees added like life insurance, loan insurance, taxes or other fees?
Here in Mexico, the best I could get on a personal short term loan was 9.1% and it was secured by putting up savings as collateral. Once they charge their 16% tax on the interest, the total effective interest ends up being about 10.9%. That’s not very good at all.
I did a little looking, and I see that even in Canada and the USA the interest rates that one would normally pay as a retail client are anywhere from 8% up to 13.5% on loans such as this. The lowest I could find advertised were from 6.5% and up. I don’t know about the hidden fees, which there usually are when borrowing, so I’d venture to say it’s likely a little higher than that.
Lend yourself money at 4.4%
Lend yourself money at 4.4%?
How could that be possible? It’s not very complex, and you just have to use tools that you might already have in your brokerage account. If not, you’d need to have the broker enable them for you.
SPX Box Spread
In this article, we will look at one of the functions of a Box Spread. We’re going to use this on the SPX which is the symbol representing the entire S&P500.
Now, the SPX is an index whose value is so high it’s not really something you’d want to trade by itself. The closing price of the SPX on August 14th was $7,785.76 so it’s not exactly something you’re going to be able to wield easily with normal trading.
We’re looking at it for another reason today. A low interest loan vehicle. That’s right, we’re going to use options to procure money that we later put to use as an investment, but with the agreement that we will pay it back later. (Or extend the loan if you wish)
Although we’re going to buy some options, and also sell some options on SPX, we don’t care at all where it goes for the purposes of the loan part. We don’t care if it goes up, or down, or straight across. We’re going to setup what is called a Box Spread. It gets that name because you’re boxing in the prices on the outer limits of your option package. In this example I am going to show you, it’s on a smaller amount, but it helps contain the visuals needed to understand what’s going on.
This image is probably too small to read unless you zoom right in on it. I just wanted to show the shape of what the order might look like on an options screen. There’s a buy of a higher priced call and a lower priced put combined with a sell of a lower priced call, and higher priced put.
By putting them in opposite corners, and at exactly the same prices, what you setup is a boxed in set of options that no matter what the price of SPX does, you are guaranteed the same result at the expiration of the contract. If we look at the trade ticket, we probably can learn some more because it has the nitty gritty and numbers of where this works out.
Order Breakdown
The order shows you exactly where the trade will end up on November 20th. In this case it tells me that it’s an “Always Loss” situation. That’s ok, I am borrowing money here, I don’t actually expect to make money on a loan. (Not this part anyway)
The Max Loss is where you can see how much interest you’re going to pay on this loan. In this case it’s $75. That’s because the amount you’re going to pay back on this loan is $7,000. The amount of money that is being deposited is $6919.84. To me that means I have a net cost on this loan of $80.16 which in real world calculations is 1.1%. Since it’s only over 95 days though, we have to accept that this is actually 4.4%
Including all of the components of the Juggernaut, the results were almost ridiculous over the past year from April 30th 2025 to April 30th of 2026.
All 4 of my Fantastic 4 performed better than 100% using my SlinkyStrategies. I had some losers in there too though, my MELI (Mercado Libre) foray was horrible, losing over -18%. I did ok with some companies like SOFI +6.9% and MSTR +22.9%, and some other small plays. LULU (Lululemon) +27.5% worked out perfectly as I managed to get out while the getting was good.
In the end though, which isn’t the end yet, the exuberance of the market has me thinking that April was the time to take the wins, bank them, and look to setup my retirement plan completely.
I won’t have much of a Canadian Pension plan, I left Canada almost 20 years ago, so I can’t rely on that, and I must think about making sure I have my own pension plan setup because I don’t want to work much longer.
After a lot of thinking, I decided I would use the gains from the Juggernaut over the past year to make the Dragon’s Eye my retirement plan. I’ve made significant moves to try to solidify where I went wrong before, and I still have some moves to make, but going forward, what I have done is created the old Bull versus Bear conflict again.
I’ve come full circle to the training I setup for myself in 2023, and I am going to use the Juggernaut as the Bear, and the Dragon’s Eye as the Bull. Two separate portfolios that will lean in slightly different directions.
The Dragon’s Eye has now taken on the responsibility to be my retirement fund. And I have installed two more “Eyes” into it the last week that I would love to explain in another article if there is some interest. I need to protect that portfolio now, as it’s going to be my retirement fund until I am gone.
The Juggernaut will play a role now as the devils advocate, holding a slightly bearish tilt to generate some income during market downturns while aiming to create weekly income through option movements. I will focus on only using the QQQ index (The NASDAQ) and see if I can manage to hedge the Dragon’s Eye successfully allowing it to be a reliable, long term retirement fund.
This has been one heck of a year, it’s a lot of fun to come up with strategies and trade them in real time. I need to make sure though that I don’t let the vacuum take it all away, so it’s time to settle down a little, and work on training the Dragon even more.
Until next time, May the 4th be with you. (That’s Monday coming up) I will be working on my “AntMan” swarm strategy and the 4 phase Micro-Mini-Macro-DeepSlinky progression models.
Burn and Learn The title of this article is Burn and Learn for a reason. The Dragon’s Eye definitely endured some heat this quarter. The wings got burned a little, as did the tail. The Eyes are still intact though, and the Dragon’s Eye is ready for what come next. This experiment is now 221 …
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Milestone Dec31 101 days into this strategy, and now it’s the end of the year. The strategy has ultimately performed a little better than I had anticipated, and has offered me some learning opportunities that I enjoyed. First let’s get right to the performance measure. The time period was just a little more than a …
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Dragons Eye
Dragons Eye ’26 This strategy focuses on a very heavy base that is as steady as it gets with a guaranteed interest rate on the account balance while still be able to use all of that balance for investing in other options. Part of it is comparable to what is known as an “iron butterfly” …
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