Investment Strategy
Options Overlay Strategy
Selective options positions for income or hedging, used only where suitable.
Overview
We layer selective options positions onto existing portfolios to pursue additional income or hedge downside risk, using them only when they fit a client's situation.
A common use: covered calls on a concentrated position while The Rubric Unwind runs. Covered calls cap gains above the strike price, and an assignment can trigger tax. Start by understanding your risk profile with our free assessment tool.
Important: Options involve significant risk and are not appropriate for all investors. Certain options strategies can result in losses that exceed the amount invested; uncovered (naked) option writing, which our Form ADV discloses we may use, carries potentially unlimited loss. Because of these risks, we offer options overlays only to clients whose financial circumstances, objectives, and risk tolerance can bear the potential loss of capital. We implement an options strategy only when it is suitable for you, and will not do so otherwise. Please discuss your experience and risk tolerance with your advisor before participating in any options strategy.
How we use options
Used selectively, for income or hedging.
Extra Income from Existing Holdings
Writing covered calls on existing holdings can generate premium income, but caps upside above the strike price and assignment can trigger tax.
Downside Hedging
Where suitable, spreads, protective puts, or collars described in our Form ADV can reduce, but not eliminate, losses on a position, at a cost, and may limit gains.
Disciplined Risk Management
Each position is sized and monitored against defined limits, with clear reporting. Some strategies still carry the potential for losses that exceed the amount invested.
Suitability First
Offered only to clients whose objectives and risk tolerance can bear the potential loss of capital. Not suitable for all investors.
Common questions
What is an options overlay?
What are the risks of covered calls?
Next step
Is an options overlay right for you?
Let’s discuss whether an options overlay fits your portfolio and risk profile.
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