Covered calls on the underlying shares fund lender returns, bringing portfolio financing to eligible investors outside the U.S.
TORTOLA, British Virgin Islands, Nov. 12, 2026 /PRNewswire/ — Ondo Stocks, which provides tokenized exposure to the economic performance of U.S. stocks and ETFs, announced today that Spout Finance will support Ondo Stocks as collateral on Solana from the first day of launch, enabling users to borrow USDC against tokenized stocks and ETFs with no interest charged by Spout.
This integration builds on Ondo’s in-kind conversion between tokenized stocks and underlying shares via Alpaca’s Instant Tokenization Network (ITN). Spout uses that route to convert Ondo Stocks to underlying shares, then sells covered calls against those shares in traditional options markets. Instead of interest payments from borrowers, the options premiums fund lender returns.
Traditional brokers typically charge interest to borrow against stocks. Spout lets users borrow against Ondo Stocks interest-free. In exchange, borrowers give up gains above the option’s strike price, when the call is sold.
Spout Finance is part of Ondo Catalyst, a $250M initiative pursuing strategic investments to accelerate the Ondo ecosystem and transformation of capital markets. Ondo Catalyst backs projects building across the Ondo ecosystem, with a focus on next-generation technologies that drive utility, scalability, and adoption of tokenized assets.
“Borrowing against stocks has always meant paying interest; the only question was the rate,” said Armand Khatri, Head of Ecosystem at Ondo Finance. “Spout changes what the borrower pays with. It sells covered calls on the shares behind the collateral and uses the premiums to pay lenders, so eligible Ondo Stocks holders outside the U.S. can borrow USDC at zero interest and give up upside above the strike instead. That only works because every Ondo Stock is backed by real shares, and approved institutions can redeem the tokens for those shares directly, which gives Spout actual stock to write options on. A covered call is an old strategy, and running it behind a token in a wallet is new.”
How It Works
Borrowers deposit Ondo Stocks as collateral and borrow USDC worth up to 50% of their collateral’s value. For example, $10,000 of collateral supports a loan of up to $5,000. Instead of the loan accruing interest, Spout pools the underlying shares for each asset and sells covered calls against them in weekly cycles:
- If calls expire without being exercised: borrowers give up no upside for that cycle.
- If calls are exercised: the affected shares are sold at the strike price and repurchased at the prevailing market price. This can leave borrowers with fewer tokens while their loan balance stays the same.
Borrowers must also maintain sufficient collateral. If the value of their tokenized stocks declines, collateral may be sold to repay the loan.
Behind the Scenes
In-kind conversion adds a primary market route for Ondo Stocks alongside cash-funded minting. Approved institutions can transfer existing shares from their Alpaca account and receive corresponding Ondo Stocks tokens in return. Redemptions reverse the process, returning shares rather than cash.
Spout uses the redemption side of in-kind conversion to support its covered-call strategy:
- Users deposit supported Ondo Stocks as collateral.
- Spout redeems the tokens for underlying shares held in its Alpaca brokerage account.
- Matching receipt tokens represent those shares within Spout’s onchain pools.
- Spout sells covered calls against the shares and uses the premiums, after fees, to pay lenders.
- Brokerage holdings and onchain records are reconciled before each options cycle proceeds.
With Spout handling the institutional conversion process, borrowers can benefit from a more streamlined covered-call lending strategy.
“For decades, the income strategies of Wall Street’s trading desks were available mostly to Wall Street’s best clients,” said J. Christopher Giancarlo, Former Chairman, CFTC; Strategic Advisor, Spout Finance Inc. “Spout is bringing a proven covered-call approach onchain, where its rules are transparent and its workings visible to all. Ondo’s investment is a meaningful endorsement from one of the leaders building the share-level infrastructure that makes solutions like this possible.”
What’s Next
Ondo Stocks are already deployed across DeFi as productive collateral. Spout will add options-funded borrowing to that growing range of uses.
About Ondo Stocks
Ondo Stocks is an issuance and redemption platform for tokenized publicly traded U.S. stocks and ETFs. It enables eligible investors outside the U.S. to gain exposure to the economic performance of these assets by minting, transferring, and redeeming securities-backed tokens. Each token is fully backed by the corresponding stock or ETF (together with cash in transit).
About Spout Finance
Spout Finance is a lending protocol for tokenized U.S. stocks and ETFs on Solana. It enables eligible users outside the U.S. to borrow USDC against their tokenized stocks with no interest charged, with lender returns funded by covered calls sold on the borrowers’ underlying shares. Borrowers can borrow up to 50% of the value of their collateral.
[*] The tokenized assets referenced herein (i.e. (i) the tokenized stocks, tokenized ETFs and tokenized ADRs now known as Ondo Stocks, and formerly known as Ondo tokenized stocks and ETFs, or as Ondo Global Markets tokens, (collectively, the “Ondo Stocks”) and (ii) USDY tokens (collectively, the “Tokens”) have not been registered under the US Securities Act of 1933, as amended (the “Act”) or the securities or financial instrument laws of any other jurisdiction. The Tokens may not be offered or sold in the United States or to US persons unless registered under the Act or an exemption from the registration requirements thereof is available. In certain jurisdictions, including the United Kingdom, Switzerland and Singapore, the Ondo Stocks and USDY tokens are offered and sold only to qualified investors or professional clients, as the case may be (or that jurisdiction’s analogue thereof). Other jurisdiction-based prohibitions and restrictions apply. The issuer of the Tokens is not registered as an investment company under the US Investment Company Act of 1940, as amended, or as an Alternative Investment Fund or Undertaking for Collective Investment in Transferable Securities in the EEA, or under the securities or financial instrument laws of any other jurisdiction.
Ondo Stocks provide their holders with economic exposure to the value of their underlying assets, including the value of dividends (less applicable tax withholdings). However, Ondo Stocks are not themselves stocks, ETFs or ADRs and the Ondo Stocks do not provide their holders with rights to hold or receive their respective underlying assets. Similarly, USDY tokens provide their holders with economic exposure to short-term US treasuries, but USDY tokens are not themselves US treasuries and do not provide their holders with rights to hold or receive any US treasuries.
In the EEA/EU, a base prospectus relating to the Tokens has been approved by the Financial Market Authority Liechtenstein (FMA) and notified, at the issuer’s request, to certain EEA Member States (the “Relevant EEA States”), making many Ondo Stocks available to both professional and retail investors, though certain Ondo Stocks are only available to professional investors in the EEA/EU. The prospectus is published at app.ondo.finance at each applicable Token‘s webpage. The approval of the prospectus should not be understood as an endorsement of the Tokens. Investors residing in the EU/EEA should read the prospectus, and the relevant final terms and KID for each applicable Token, before investing in order to fully understand the potential risks and rewards associated with the decision to invest. This notice is a marketing communication and does not constitute a prospectus.
Certain Ondo Stocks (referred to in the UAE as “Digital Securities”) have been admitted to trading on Nest Exchange Limited, a Multilateral Trading Facility for Digital Assets operated by Binance in the Abu Dhabi Global Market (“ADGM”), authorised by the Financial Services Regulatory Authority (the “FSRA”). Such Digital Securities are available for trading by those investors eligible for a Binance account. The ADGM FSRA has no responsibility for reviewing or verifying any documents in connection with the admission to trading of such Digital Securities in the ADGM. The FSRA has not approved the documents in connection with the admission to trading nor taken steps to verify the information set out in it and has no responsibility for it. No offer of securities is being made in ADGM. Prospective purchasers of such Digital Securities admitted to trading should conduct their own due diligence on such Digital Securities.
In the United Kingdom, the communications herein may be deemed a financial promotion pursuant to Section 21 of the Financial Services and Markets Act 2000. To the extent that any such finding is made, the communications herein are only intended for, and directed at, investment professionals as defined in article 19 of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the “FPO”) who have experience of interacting with the Ondo Stocks and USDY tokens; high net worth companies as defined in article 49 of the FPO, and/or any other persons to whom lawful communication is permitted. Any person not falling within these categories is not permitted to act upon anything within the communications herein, and shall not be entitled to rely upon their contents. Ondo Global Markets (BVI) Limited will not enter into arrangements with such persons concerning Ondo Stocks and USDY tokens as a result of this or any other communication.
The Tokens are issued by Ondo Global Markets (BVI) Limited, a British Virgin Islands business company. OUSG tokens are issued by Ondo I LP, a Delaware (USA) limited partnership (the “Fund”). Ondo Finance Inc., a Delaware (USA) corporation, provides tokenization services to, and is an equity holder of, Ondo Global Markets (BVI) Limited.
The communications herein are only intended for eligible purchasers of, or for actual or potential business relationships or technical integrations with respect to the Tokens. Nothing herein constitutes any offer to sell, or any solicitation of an offer to buy, any Tokens. Nothing herein constitutes investment, legal, tax or financial advice. Acquiring the Tokens involves risks. A holder of the Tokens may incur losses, including total loss of their purchase price. Past performance is not an indication of future results. Investors are responsible for conducting their own research, investigation, verification, checks or consultation for professional or investment advice.
The communications herein may contain forward-looking statements, including, but not limited to, statements regarding future financial performance, business strategies, or expectations for the growth or development of Ondo Finance, Ondo Global Markets (BVI) Limited, or any of their respective affiliates (each, an “Applicable Entity”). These statements are based on management’s current expectations, estimates, projections, and beliefs, and are subject to a number of risks, uncertainties, and assumptions that could cause actual results to differ materially from those anticipated. Forward-looking statements can be identified by the use of terminology such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or the negative of these terms or other similar expressions. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include, but are not limited to, the following: economic, competitive, legal, governmental, and technological factors affecting the operations, markets, products, services, or prices of any Applicable Entity. No Applicable Entity undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Additional terms and restrictions apply. See docs.ondo.finance/legal/terms-of-service, docs.ondo.finance/ondo-stocks, ondo.finance/stocks, app.ondo.finance and (as applicable) the Token offering documents for details.
Additional geographic restrictions may apply for tokenization services based on local regulatory requirements. Alpaca’s Instant Tokenization Network is owned and developed by AlpacaDB, Inc. Neither AlpacaDB, Inc. nor Alpaca Securities LLC issues tokenized assets or performs the tokenization of assets; tokenization is performed by third-party issuers. Alpaca Securities LLC provides brokerage, custody, clearing, and settlement services solely with respect to the underlying securities.
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SOURCE Ondo Finance
