Wealth Management

Persons with large concentrated positions in a particular company's stock can face significant concerns for a lack of diversification and be overburdened with the risk and volatility of this investment. To alleviate this exposure, Ramirez & Co can offer an array of alternate strategies for managing the position by using hedging and diversification strategies to offer more liquidity, protection from downside movements in the stock price and delay tax consequences for stock with low cost basis.

Hedging Monetization Strategies:

Restricted Stock Sale: A sale that complies with SEC Rule 144 and is used when interested in liquidity and no longer wants to maintain position. This solution gives you cash for diversification or other financial needs.

Purchase of a Put Option: Used to limit the downside exposure of to the underlying equity

Writing of a Call Option: Used to enhance yield of the underlying equity

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.

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Note: Options are not suitable for all investors because of the special risks associated with certain strategies that can expose the investor to potentially significant loss.  Therefore, 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.