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Purchasing Put Options

Owners of concentrated positions looking to protect their stock from downside risk may want to consider purchasing protective put options.

What is a put option?

A put option provides the shareholder the right to sell 100 shares of stock to the seller of the put option at a specified price until a specified date. The specified price is known as the strike price, and the specified date is the expiration date.

Concentrated Positions and Donor-Advised Funds

Holders of concentrated stock positions have several options for mitigating the risk associated with owning these shares. For those who are charitably inclined, the ease, convenience, and overall benefits of a donor-advised fund may make it a particularly attractive solution.

 

Using an Equity Collar to Manage Concentrated Risk

Whenever owners of concentrated stock positions have obtained their shares at a cost well below the stock’s current fair market value, an equity collar may be the answer. Although the gain has yet to be realized, many shareholders wish to preserve the value of the shares without entering into a taxable liquidating transaction. To secure share value, the owner could simply purchase protective put options, but put premiums make this an expensive proposition.

Outright Sale of a Concentrated Stock Position

Most owners of concentrated positions understand the risks inherent in continuing to hold their shares. A significant drop in the price of the issue has the potential to inflict irreparable harm on a portfolio. One guaranteed solution to the problem is to sell the stock, but many owners are wary of the tax implications of implementing this simple strategy and are therefore hesitant to take action. Sometimes, however, the simplest option produces the best result.

What Yoga Is Teaching Me About Financial Planning

I started practicing yoga more than ten years ago and I can honestly say that it has changed my life for the better. It helped me deal with grief, launch my financial planning business, focus on what matters most, and has simply given me more energy in my every-day life.  

Today yoga is becoming more and more popular around the world. From Silicon Valley offices to tiny villages in Africa, people everywhere are learning about the benefits of blending mindfulness and physical activity.

Use Tax Season To Get Your Financial House In Order

Whether you complete your own tax returns or hire an accountant, filing your taxes may not be one of your favorite activities. But filing your taxes does present a good opportunity to get your financial house in order. So, as you sit down to gather and organize your records this year, keep the following tips in mind:

Staying Financially Focused During Uncertain Times

Uncertainty is not a new concept within the life sciences sector. Based on recent industry and market news, it is apparent that 2017 will not prove to be any different. While uncertainty can be disconcerting, especially when it comes to your career and your finances, it’s important to maintain perspective. If there is one constant within the financial markets, it is uncertainty.

5 Tips for Managing Your Year-End Finances

With the holiday season shifting into full swing, finding the time to focus on your finances can be a challenge for many people. However, as the clock winds down on 2016, there are several important steps you may want to consider to help minimize this year’s tax bill. Scroll down for more details on actions you may want to take before year-end.  

Don’t Ignore Benefits Enrollment Season

Fall means open enrollment season—an opportunity to adjust your benefits elections prior to the start of the New Year. Yet surveys often reveal that many employees are not fully aware of all their employer-provided benefits and don’t take full advantage of them.

To ensure you are not missing out on valuable benefits, be sure to participate in your employer’s open enrollment period this year. This is your opportunity to sign up for benefits or adjust your current plans and coverage amounts. Here are a few important benefits to consider:

Time to Revisit Your Annual Financial Goals

Before the busy holiday season arrives, I recommend taking some time to reexamine your finances. Here are five steps you can take to improve your financial picture before year-end.