Welcome to Twenty-First Securities’ Interactive Guide to Hedging Low-Basis Stock.  When a stock achieves its investment expectations, investors sometimes believe that their only options are to sell it and pay a capital gains tax or continue to hold it and watch it rise or fall. In fact, there are other choices available to take a few chips off the table without triggering tax or giving up ownership. The decision tree summarizes the various forms of low-basis stock holdings and the hedges that are appropriate in each situation. The articles discuss these issues in greater detail.

Relevant Articles:

Hedging Low-Basis Stock

Hedging Basics

The 21st Solutions to Hedging Low-Basis Stock

Swaps for Pre-1984 Stock

One-Instrument Collars for Post-1983 Stock

Protection for Restricted Holdings

FSA Takes Hard Line On Capitalization

Hedging Nonqualified Stock Options

Protecting “Synthetic” Equity Positions

Protecting Passive Investments in Collective Vehicles

Going Forward (Variable Forward TAM)

The Hedging Product of Choice

Considered Responses: Hedging ISO Stock

No-Action Letter Says Insiders Can Collar Options


MyStockOptions Series:

Strategies For Hedging Concentrated Stock Positions (Part 1)

Strategies For Hedging Concentrated Stock Positions (Part 2)

Strategies For Hedging Concentrated Stock Positions (Part 3)

Hedging Your Employee Stock Options (Part 1)

Hedging Your Employee Stock Options (Part 2)

Hedging Your Employee Stock Options (Part 3)

Hedging Your ISO Stock


Articles are provided for information purposes only.  They are not intended to be offers to engage in any securities transactions or to provide specific financial, legal or tax advice. Articles may have been rendered partly inaccurate by events that have occurred since publication.  Investors should consult their advisers before acting on any topics discussed herein.

Options involve risk and are not suitable for all investors.  Before engaging in an options transaction, investors must review the booklet "Characteristics and Risks of Standardized Options".

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