Between 2 concentrated-stock strategies, a clear winner

For wealthy investors with concentrated holdings in appreciated stocks, one type of options contract tied to a loan is better than another "in nearly all circumstances," a new study found.

But financial advisors and clients seeking to tap into the tax advantages of a variable prepaid forward over a simpler, but less effective strategy called an options collar with a margin loan must be so-called qualified purchasers undertaking a complex transaction of at least $1 million, according to the study that has been accepted for publication in the Journal of Wealth Management later this year.

Authors Brent Sullivan, the writer of the Tax Alpha Insider newsletter and blog, and two executives from San Francisco-based registered investment advisory firm Fort Point Capital Partners — Head of Derivative Solutions Roy Haya and Managing Partner Ralph Dryborough — posted the study in March and revised it last month.

The regulatory definition's requirement that "qualified purchasers" have at least $5 million in liquid net worth overall will render the report's conclusions as merely academic to most investors. But the discussion around such strategies is driving into an intersection with two imp

Fuente original: Yahoo Finance (https://finance.yahoo.com/markets/options/articles/between-2-concentrated-stock-strategies-194754366.html)