Our Position Monetization strategies assist clients in optimally reducing or hedging concentrated stock positions.
To assist clients in optimally exiting or hedging concentrated holdings or portfolios, Panthera Capital designs bespoke options strategies. Large share positions are typically received from venture capital fund distributions, employee stock compensation (options, RSUs, ESPP), or corporate acquisitions. Clients may also have investments that have large short-term capital gains, which they wish to defer until they qualify for long-term treatment. We work with clients to determine an appropriate liquidity horizon for their positions and then develop an optimal monetization strategy.
Strategies include generating some liquidity by selling at prices above volume weighted average price (VWAP) while retaining upside and protecting against downside moves. This typically involves executing share sales at opportunistic prices combined with option structures (covered call writing or collars). Our covered call strategies focus on monitoring opportunities in the underlying volatility surface to opportunistically monetize elevated call volatility and maximize yield while retaining upside. Our collar strategies add downside protection through long puts.
Panthera Capital accepts in-kind position transfers from other brokerage accounts on a management fee-only basis, i.e., we do not charge a performance fee. We work with clients to optimally exit such positions over time while using the proceeds to fund actively managed strategies.
The following analysis provides an example of an option collar strategy designed to hedge certain client’s underlying equity exposure.
Panthera-Capital-PLAN-Hedging-Analysis-072020