DEFINITION
portfolio
Grow Assets
Grow assets by helping clients deploy idle cash to capture growth without the fear of losing and converting new prospects with a customized investment strategy that is not readily available elsewhere.
Protect Gains
Protect gains for clients with large concentrated positions without triggering tax liabilities. Offer the service level historically reserved to ultra-high-net-worths and family offices.
Save Time
Save time on counseling clients in periods of heightened volatility because the principal is protected. Offer an innovative solution without the need for extensive research on complex derivatives.
How it works
Algorithmically Optimized Portfolio
Buy US Treasury
Use interest earned to buy listed options without risking the principal.
Buy Call or Put Option
Create the desired exposure to the upside or downside of the underlying.
Sell Call or Put Option
Cap the upside of the structure to minimize the premium required.
understanding
Benefits include full return of principal at maturity, liquidity, transparency, customized stock exposure, and no counterparty risks.
Risks include foregone upside and PPOs trading below cost prior to maturity.
FAQ
What is a Principal Protected Outcome (PPO)?
PPO are a type of investment that allows investors to participate in the equity market with a 100% (or less if desired) protection against losses when held to maturity. It typically involves buying a zero-coupon bond and buying and selling a combination of equity options. The principal is protected by the bond investment while the upside is created from the options.