Use a box spread as a line of credit

In an idealized world, you could borrow at the Effective Federal Funds Rate (EFFR) and also earn roughly the same rate on cash deposits. For simplicity, assume the relevant short rate is fixed for a month. Let’s say it turns out to be 10% per month . Assume the stock will rise by 20% that month. In reality, lenders (and banks taking deposits) need to earn a spread, so borrowing and deposit rates…