Client Situation
Retirement & Future Goals
Your client's investments may have a job to do later. Manage the path between today and the goal that matters.
A future expense can turn market volatility into a timing problem. Parity lets you compare protection, income, and upside tradeoffs for 100 shares leading up to a major life event.
Outcomes are shown per 100 shares, since one option contract covers 100 shares. If your client owns more, the structure repeats.
Home / Down Payment
Manage downside before money may be needed for a home purchase.
College Tuition
Plan around a known tuition date while deciding how much market exposure to keep.
Wedding
Generate income or reduce downside ahead of a major planned expense.
Retirement
Reduce uncertainty as a planned transition approaches.
Major Purchase or Life Event
Match the investment outcome to the date the money may be needed.
The closer the date gets, the more the path matters.
Today
Life event
Own 100 shares
Money may be needed
Outcome window
Define the maximum loss
Use a collar to establish a defined downside limit while retaining capped market upside.
Absorb the first part of a decline
Use a buffer to protect against the first portion of a market decline while keeping some upside.
Generate income + build a cushion
Sell a covered call against 100 shares. Option premium and expected dividends can generate cash toward the upcoming expense while also cushioning the first part of a decline. In exchange, upside is capped.
What matters most before your client's date?
Limit how much your client can lose
Compare collars with a defined maximum loss.
Protect against the first part of a decline
Compare buffers with first-loss protection.
Generate income before the date
Compare covered calls that turn option premium and expected dividends into both income and a downside cushion.
Example: 100 shares of SPY · money needed in 6 months
Illustrative comparison using one 100-share position held toward the target date.
Stay unprotected
Full market upside · Full market downside
Covered Call
Income generated · Income-based downside cushion · Capped upside
Buffer
First-loss protection · Capped upside
Collar
Defined maximum loss · Capped upside
Model an outcome for your time horizon
Choose an investment and the period closest to when you may need the money to see the existing modeled downside and upside boundaries.