Client Situation
Protect & Define Your Client's Outcome
Keep the shares your client wants to own while changing how much downside they take.
Your client does not have to sell a position to change its risk, and you do not have to pick option contracts yourself. Choose the protection, income, and upside your client wants, and Parity translates that into the option structure that creates it.
Outcomes are shown per 100 shares, since one option contract covers 100 shares. If your client owns more, the structure repeats.
Why not just sell?
Selling removes the downside, but it also removes the shares. For appreciated positions, selling may also create tax consequences. Parity lets you model how your client can keep the position while changing its risk.
What happens if your client's stock falls?
Illustrative comparison for 100 shares held through expiration.
Unprotected
Protection
None
Downside
Full decline
Exposure
All losses are yours
Upside
Uncapped
Covered Call
Protection
Downside cushion
Downside
Income offsets the first part of a decline
After protection
Losses resume after the income cushion is exhausted
Upside
Capped
Buffer
Protection
First-loss protection
Downside
Initial losses absorbed
After protection
Losses resume below the protected range
Upside
Capped
Collar
Protection
Hard downside floor
Downside
Defined maximum loss
After protection
Loss is capped at the floor
Upside
Capped
Start with the outcome, not the options.
You choose
How much protection, potential income, and potential upside your client wants—and for how long
Parity
Parity shows you how
The exact trades needed to create it
Model protection for an investment you own
Enter an investment and the shares you own to compare how each existing approach changes the modeled downside and remaining upside.