Hedging and Monetization Group Clients with concentrated positions in a particular company's stock can face significant concerns due to a lack of diversification and increased risk and volatility in their portfolio. To rebalance your account and alleviate this exposure, Ramirez & Co can offer an array of alternate strategies for managing this volatility. By employing hedging and diversification strategies, we can offer more liquidity and protection from downside movements in the stock price and defer the tax consequence for investments with a low cost basis. Hedging Monetization Strategies: Restricted Stock Sale: A sale that complies with SEC Rule 144, is used when a client is interested in liquidity and wishes to reallocate their holdings. This solution gives cash for diversification or other financial needs. *Purchase of a Put Option: Used to limit the downside exposure of the underlying equity position. *Writing of a Covered Call Option: Used to enhance yield of the underlying equity position. *Zero-Premium Collar: Used to hedge the price risk of the underlying equity by purchasing a put option and selling a call option against the position. At maturity, the investor is protected from the depreciation below the put strike price and participates in the appreciation of the security up to the call strike price. Variable Prepaid Forward: Allows an Investor to obtain a minimum sale price for a stock (typically equal to 80%-90% of today's stock price) as prepayment for its forward sale without triggering a taxable event until maturity. * Prior to utilizing any option hedging strategy, it is required that you read the booklet entitled "Characteristics and Risks of Standardized Options" which is available from Samuel A. Ramirez & Co, Inc.