Buying With Leverage
The leveraged buy turns your USDC into a larger stock position in one step, financed by a 0% loan.
Why hold leverage here
Leverage is usually paid for by the day. At a published margin rate of 12.075% a year (Schwab and Fidelity, balances under $25,000, broker rate pages, 13 October 2026), borrowing $10,000 for a year costs about $1,208 in interest before compounding, whatever the stock does. A perpetual future charges funding instead, at a rate that moves with demand.
On Spout the loan is 0%, so a leveraged position held for a year carries no interest at all. What you give up is the move above the strike in a cycle where calls are exercised. What Borrowing Really Costs You explains it in full.
That makes the leveraged buy suited to positions you plan to hold. For a trade you open and close within a day, financing barely matters anywhere.
How it works
You pick an amount and a leverage level from 1x to 1.98x. In a single transaction that you sign, the protocol:
- Borrows the extra USDC from the lending pool at 0%.
- Buys the tokenized stock at the issuer's quoted price with your USDC plus the borrowed USDC.
- Deposits the stock as your collateral and opens the loan.
If any step fails, the whole transaction reverses and nothing happens.
Why 1.98x and not 2x
At the 50% maximum LTV, the most leverage possible is 2x. The cap sits slightly below that because the issuer's quoted price and the price Spout uses to value collateral can differ a little. The small margin stops a new position from opening above 50% LTV.
The leverage table
For every $1,000 you put in. The last three columns show how far the stock can fall before liquidation on GLD (54.1% threshold, the lowest), NVDA (58.8%, a middle one) and MSTR (62.5%, the highest).
| Leverage | Stock bought | Loan | Starting LTV | GLD can fall | NVDA can fall | MSTR can fall |
|---|---|---|---|---|---|---|
| 1.00x | $1,000 | $0 | 0% | None | None | None |
| 1.25x | $1,250 | $250 | 20.0% | 63.0% | 66.0% | 68.0% |
| 1.50x | $1,500 | $500 | 33.3% | 38.4% | 43.3% | 46.7% |
| 1.75x | $1,750 | $750 | 42.9% | 20.8% | 27.1% | 31.4% |
| 1.98x | $1,980 | $980 | 49.5% | 8.5% | 15.8% | 20.8% |
High leverage leaves very little room on the steadiest assets, because their thresholds sit closest to 50%. At 1.98x on GLD, an 8.5% fall starts a liquidation.
Leverage magnifies both directions
Your gain or loss on the money you put in is roughly the stock's move times your leverage. At 1.5x, and if no calls are exercised, a 10% rise in the stock is about a 15% gain on your $1,000; a 10% fall is about a 15% loss. Because there is no interest, a flat stock costs you nothing.
After you buy
The position is an ordinary borrowing position. You can repay, add collateral, borrow more up to 50% LTV, or withdraw once the collateral has been through one options cycle and its tokens are back in the pool.