BOX ETF any thoughts experience / risks? Can you really get more return than that from purchasing Bonds They claim Tax advantage , but for non US tax payers how does it matter?
How did they manage to make the chart straighter than a straight ruler? Is it a Ponzi Scheme or what? I can see the volume picks up in 2024. The price has already gone up too high. Tax or no tax, I wouldn't chase after the boat / market. Next Q : Which button to press first? BUY or SELL or none at all?
That's beyond impressive. INFO: BOXX is the first ETF intended to access risk-free rates via an options strategy called a box spread. A box spread utilizes option contracts that cancel out risk exposures while insulating its payout from movements in the underlying security.
Box spreads on S&P 500. Slightly better returns than U.S. treasuries. Better tax advantages for some depending upon state taxes. This article explains it pretty well. https://seekingalpha.com/article/4654077-boxx-etf-blending-options-tax-efficiency-and-ultra-low-risk
I looked at this a bit...couple comments 1) I think the risks is significantly higher than they imply. You are essentially buying options with some unknown counterparty with OCC as the theoretical backstop if they default. Default by the counterparty certainly seems much more likely than default on a t-bill. Governance of OCC seems chock full of wall street insiders, I'm not sure how one could trust them to have your best interests at heart any more than one found out they could trust DTCC during the GameStop debacle. What if the change rules or don't have enough collateral? What if they pull an LME and break a trade? 2) The tax benefits seem pointless for anyone with a state income tax. Tbills are exempt, this is not. The main argument seems to be that by not distributing dividends and instead appreciating in price you can defer tax. Also, the fund itself has some potential tax liability, unlike just owning treasuries. My opinion. Rolling 1 month tbills in Treasury direct gets you 5.386%. 1 year returns on this are 5.29%. It seems like the only advantage this has is trying to defer capital gains. In exchange I think the risk is much higher. "The insolvency of a brokerage firm could present risks for that firm’s customers, whether they are investors in options or in other securities. If a brokerage fi rm or the OCC Clearing Member that carries the fi rm’s accounts at OCC were to become insolvent, the fi rm’s customers could have some or all of their options positions closed out without their consent. Customers whose options positions were not closed out under these circumstances might experience delays or other dif i culties in attempting to close out or exercise af f ected options positions. Similarly, the insolvency of an associate clearing house could present risks for the customers of brokerage fi rms whose accounts are carried through that associate clearing house." In OCC's 96 page risk document, they mention insurance zero times. Therefore I assume they have none. https://www.theocc.com/getmedia/a151a9ae-d784-4a15-bdeb-23a029f50b70/riskstoc.pdf; There seem to be a wide variety of "devil in the details risks" like: what if the makeup of the index charges?