SEPARATELY MANAGED ACCOUNTS
Single Stock Strategy
The Shelton Single Stock Strategy is designed to implement an Option Overlay on a large concentrated single-stock position that a client may not wish to sell. With a customizable risk/return trade off, we seek to make existing assets more productive. We continuously monitor existing and potential option positions for the most advantageous option given the clients risk/return objectives and the current asset’s characteristics. The strategy’s goal is to enhance returns above the stand alone performance of the stock by 2-6% annually depending on the underlying stock.
Advisors can also use Shelton Single Stock Strategy to seek higher income from a concentrated stock position while enabling a gradual, planned reduction in stock concentration over time, helping the assets move into a more diversified managed portfolio.
Advisors can use the Shelton Single Stock Strategy to capture concentrated positions that clients may now be “holding away,” because they wish to continue owning the stock and don’t realize how the advisor can add value. No investment strategy is without risk. Upside potential is limited, the estimated cash flow target may not be met, and a change in the Target Price may require additional shares or cash.
The option overlay makes such assets visible to the advisor and gives the advisor a continuing role in monitoring their place in the client’s overall net worth.
There are management Fees and other charges associated with the Shelton Separately Managed Account programs.
Options involve risk and are not suitable for everyone. Prior to buying or selling an option, your client must receive a copy of CHARACTERISTICS AND RISKS OF STANDARDIZED OPTIONS. Copies of this document may be obtained from any exchange on which options are traded or by contacting The Options Clearing Corporation, One North Wacker Dr., Suite 500, Chicago, IL 60606 (1-800-678-4667).
Any strategies discussed, including examples using actual securities’ price data, are strictly for illustrative and educational purposes only and are not to be construed as an endorsement or recommendation to buy or sell securities. You should review transaction costs, margin requirements and tax considerations with a tax advisor before entering into any options strategy.