LBOX

Overview

GraniteShares Short Term Box ETF ("LBOX") is an actively managed ETF designed as a low-cost potential alternative to money market funds and short-term, conservative fixed income allocations. The Fund seeks capital appreciation using box spreads - a market-neutral options strategy, historically used by institutional market participants, that combines synthetic long and synthetic short options positions on the same reference asset to lock in a fixed, bond-like payoff at expiration.

LBOX targets short-duration box spreads using FLEX Options, seeking T-bill-like returns while aiming to avoid annual income distributions.

A box spread combines a synthetic long options position with an offsetting synthetic short position on the same reference asset, creating a market-neutral structure with a fixed payout at expiration - regardless of how the reference asset moves in between. All four option legs share the same expiration date and are entered together as a single trade, never legged in individually.

LBOX targets short-duration box spreads - generally established with one- to six-month maturities, with tenors across the portfolio ranging from zero to six months as positions age - buying, holding, and rolling positions to pursue capital appreciation while seeking to avoid annual taxable distributions. Positions use European-style FLEX Options, exercisable only at expiration, cleared through the Options Clearing Corporation (OCC), a Systemically Important Financial Market Utility.

Box spreads are not new: institutional desks, options market makers, and hedge funds have used them as an efficient lending and borrowing market for decades - the strategy was documented in academic literature as early as 1985 (Billingsley & Chance, Financial Review).