Equity Hedging strategies & techniques, significant single stock concentrations, custom monetization

Equity Hedging

Equity hedging and risk management techniques are a solution for many investors who are subject to an undesirable level of risk due to having a substantial portion of their net worth tied up in one or a few individual stocks. The concentration may be due to an inheritance, sale of a business or a number of other reasons.

Equity hedging strategies1 may offer the ability to protect, monetize (convert into cash) or enhance the yield of positions that an investor may not want to sell, or are possibly unable to sell. There are two common types of equity hedging solutions: equity collars2 and variable prepaid forwards. Listed options and exchange funds are additional hedging strategies3 that may be employed4, depending on your individual situation. Equity hedging strategies are speculative, lack liquidity, and are not suitable for all investors, and there is no assurance they will succeed.

Your Private Wealth Management team will work closely with our equity hedging specialists—leveraging SunTrust’s market expertise and results-oriented innovation—to understand your individual circumstances and customize a solution for your particular objectives.

To speak with a Private Wealth Management advisor call 866.495.5416.


1Offered by SunTrust Investment Services, Inc.

2Transactions costs for multi-leg options strategies, including collars, may be significant as they involve multiple commission charges.

3Variable prepaid forwards are subject to investment risks, including possible loss of principal. Capital gains tax is deferred until maturity of the contract at which time a taxable event may be triggered by the delivery of the actual shares. There may also be counter-party risk is such a transaction in the event the executing firm defaults. If such an event were to occur, there would be a loss of downside protection.

4Options trading entails significant risk and is not suitable for all investors. For a current options disclosure document, please call the Centralized Supervision Group, 804.594.1167. Investors should consult with their tax advisor in order to determine tax implications of options transactions. Supporting documentation for any claims, if applicable, will be furnished upon request.

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To speak with a Private Wealth Management advisor:

  • 866.495.5416

Investment and Insurance Products:

  • Are Not FDIC or any other Government Agency Insured
  • Are Not Bank Guaranteed
  • May Lose Value

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