There are many scenarios that can lead to a concentrated stock position, and monetization strategies can be effective solutions for optimizing your portfolio’s performance and providing needed liquidity. We offer diligent counsel to investors, helping you implement strategies to alleviate potential risk while staying aligned with your goals.
Our experienced team is knowledgeable of tax and regulatory standards, and works prudently to preserve clients’ anonymity throughout the process. We understand the many factors our clients must take into account while managing their options, and offer the resources and expertise to ensure seamless and efficient execution.
Our Expertise
Our team has the breadth of knowledge and resources to quietly and confidently generate innovative monetization solutions for our clients. Driven by a disciplined process, we provide sound advice when it comes to underwriting, structured lending, share buybacks, restricted stock sales and other monetization transactions.
- Execution – Maintaining discretion is a top priority, which is why we facilitate all trades and transactions directly from our monetization desk.
- Insight – We work alongside a team of analysts and tap into our extensive research capabilities to provide you with comprehensive insight across global and regional markets and a wide range of sectors.
- Compliance – High‐level transactions require diligence and expertise to navigate regulatory nuances. We stay educated on changing compliance standards and legislation to ensure we deliver effective and well-constructed strategies.
- Capital – By facilitating trades directly with our proprietary monetization desk, we’re able to offer competitive pricing for our clients.
Our Strategies
We offer a suite of strategies to address your monetization needs, tactically using your assets to create liquidity, minimize risk and strengthen your portfolio.
- Outright sale – In some cases, the systematic sale of a client’s full or partial position in a market can outweigh alternatives and capital gains taxes, and provide the immediate liquidity that’s needed. While doing so can eliminate downside risk, investors should both consider the tax implications as well as the loss of upside appreciation, dividends and stock ownership.
- 10b5‐1 – Corporate executives often have unique limitations to consider when making transactions, and this program can be an opportunity for convenient diversification, while retaining protection from insider trading liability. While effective for minimizing negative publicity, investors have no control over the purchases or sales of stock, and the 10b5‐1 can generally be terminated at any time.
- Purchase puts – This strategy secures a minimum price for the position, while leaving you open to participate in future price gains. While doing this eliminates downside risk below the put strike, there can be a significant cost associated. There is also a downside price risk to the put strike, and the investor remains undiversified.
- Sell calls – Selling a call option provides an upfront premium that increases current yield on the stock position. Investors receive immediate liquidity and are hedged to the extent of the premium received, but at a significant downside price risk, and forfeit upside appreciation above the call strike.
- Collar – Implementing a costless collar allows you to maintain stock ownership and hedge downside risk, and offers liquidity with a loan against the collar. Investors, however, forfeit the upside appreciation above the call strike, are put at a downside price risk to the put strike, and remain undiversified.
- Variable delivery forward – This strategy offers similar protection to a collar as well as immediate liquidity. Investors retain their stock ownership and reduce downside risk, but forfeit the upside appreciation above the upper limit and incur a downside price risk to the extent of the upfront payment.
Investing involves risk and you may incur a profit or loss regardless of strategy selected. Options involve unique risks, tax consequences and commission charges and are not suitable for all investors. When appropriate, options should comprise a modest portion of an investor’s portfolio. No statement within this document should be construed as a recommendation to buy or sell a security or to provide investment advice. Prior to making any options transactions, investors must receive a copy of the Options Disclosure Document which may be obtained from your financial advisor, from theocc.com/about/publications/character-risks.jsp or by contacting Raymond James at 880 Carillon Parkway, St. Petersburg, FL 33716. Supporting documentation for any claims (including any claims made on behalf of options programs or the options expertise of sales persons), comparison, recommendations, statistics, or other technical data, will be supplied upon request.
“OUR TEAM HAS THE BREADTH OF KNOWLEDGE AND RESOURCES TO QUIETLY AND CONFIDENTLY GENERATE INNOVATIVE MONETIZATION SOLUTIONS FOR OUR CLIENTS“