Account Financing via short SPX box - Expiry

F

freebee34

I am using Short BOX SPX options trade on my fidelity account for cheaper financing (0.85%) than the margin rates (8.75%). This provides a leverage ratio of about 2:1 or 50% equity. One position is short the June 18th 2021 SPX box for a total credit of $180,000. Another is short the Dec 17th 2021 SPX box for a total credit of $60,000. I wanted to know what happens to my portfolio at expiry (June 18th 2021). the cash is currently sitting in a diversified portfolio of stocks. For tax reasons, I would prefer to not liquidate the stock positions to pay the debt due. I had the following questions about this trade:
  1. At expiry if I do nothing will fidelity magically create a margin debt in my account?
  2. if not will I get a margin call without holding the cash?
  3. Can I open a similar short box position on the day before expiry and use those proceeds to pay off the cash owed?
  4. Is there another way that I can borrow to pay off the debit?
 
What I do is I create a new box on the same day that the old box expires. The SPX options settle to cash on the day after the settlement price is determined (i.e. the day after the "expiry date"). Likewise, the trades of the new options settle T+1 too. As a result, I can refinance my "loan" without incurring any broker margin interest, by selling a new box on the expiration date of the old box.
 
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