Variable prepaid forward vs. option collar
Similar solutions... very different outcomes
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I’m on The Investor’s First Podcast with Steve Curley and Chris Cannon, talking about tax planning, seeding ETFs in-kind, and concentrated stock solutions. Episode available here.
New paper!
I teamed up with my pals Ralph Drybrough and Roy Haya on a paper comparing the variable prepaid forward contract to an option collar with a margin loan.
People typically use VPFs and collars when they like a name they’re holding, but want to reduce idiosyncratic risk and retain some upside while they make arrangements to exit the position.
These two structures “hedge and monetize” concentrated public stock positions, albeit with some nuanced distinctions…
