Ask the person to provide a put call diagram. Basically its a graph where the (future) price of the stock is on the X axis and your profit loss is on the Y. Simple to understand.

I'm simple, and am biased against that type of trading. I get it - it lowers risk. But a) reduced risk comes with reduction in maximum possible gains, b) there is an overhead cost to this stuff - you are paying transaction costs. The person on the other end of the phone may have a business incentive to get more transactions done, and not necessarilly be acting in only your interests.

Go back a step. What is it that you are trying to accomplish? Are you just trying to lock in your gains, but don’t want to sell now for tax reasons?

What does he recommend doing with the other 2/3 of the holding?

How 'tight' would the collar be (i.e., how much upside and downside exposure would you have)?

Where are you on the fear/greed scale - can you bear to lose all the paper gains you've got right now if you don't put the collar on? Can you bear to miss out on the future upside that you might miss if you hit the top side of the collar?

Lots of personal comfort level questions in there.

For me: I don't mind leaving some upside on the table to prevent a catastrophic downside.

If it were I, and the math supported it - I might put a portion of the holding in a collar, with the downside protection guaranteeing that I'd get my initial investment back plus 10%/year for each year that'd I'd held the stock. That way, if it all went tits up, I at least made out about the same as I would have if had never invested in Arista in the first place and just put the initial investment into a boring, steady index fund. Whatever remainder of the holding is not in the collar, then let it ride.

We will be getting a packet with all the information we talked about.

This does seem like a good idea to me but I don't know anything about it and my wife handles the financial business.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

This. It sounds like you have already been holding for more than a year, so already have the long term gains tax break if you should decide to sell.

I'm not sure why he is wanting to hedge with shorts rather than just put a stop loss to sell. He may be trying to do a leveraged short on a third of your portfolio at 3x leverage to basically cover downside risk of your entire holdings of it or something.

I'd ask him to explain the strategy and the benefits of doing a collared short mechanism in place vs stop limit order to just sell below a certain price vs holding longterm and riding it out. I can think of mulitiple advantages/disadvantages of the approaches, but not sure what's the crux of his thinking.

Like ike said, he could be biased as this somehow creates more fees or commission or something for him or fidelity, so he might be biased. Or he might just be trying to show off and be fancy and making it over complicated.

one thing that is not always obvious in sell order is the volume of sells and buys. The key point is for you to sell there has to be a buyer. If the sales volume on the stock is not very high and you have a significant holding in # shares to sell, you may be in trouble the day that you want to sell and there are virtually no buyers. That is why a sell order is not a guarantee of anything. A collared short might be a more preferable situation based upon his reading of the stock? hedging can be a really complicated business, and put and calls are not all that obvious for how they protect you.

We just want to be able to protect the gains. We don't want to sell for two reasons, one we are attached to the stock and we know that we will never have this kink of opportunity again. The other reason is that we don't need the money.

We are both very unsophisticated in this and don't want to lose it if/when the market turns around.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

If you are attached, that is emotional. Better work hard on letting that go. It will only end up hurting you sooner or later by holding on to it longer than you should.

On never having the opportunity like this again...not sure what you mean. you already made great money. From today, right now, you have the same future opportunity as everyone else. Anyone can buy this stock at current market price, same as you. Your one of a kind opportunity, as you put it, already happened with the 100x gainz. You should only be looking at holding/selling based on what the price will do vs current price today. That's it. What it did in the past for you (the big gains) is irrelevant.

I know didn't ask for these opinions, just wanting commentary on a collard swap. :*)


.

I meant that we will never get an opportunity to buy a stock like this at opening. We know the company and think it still has a big upside, so selling the upside to protect the downside might not be so great. Also, what to I do with a very large chunk of money if I do sell.

At some point everything has to correct. Things have gone up very quickly. Right now I think Arista is at 290, last year it was at less than 160 and we were rich.

I'm happy that you're asking. It will only help me with this decision.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

I only know a little about this stuff. But, FWIW:

1. I would never buy a financial product I don’t understand.

2. If your main goal is to lock in the gains, then ask the advisor why you’re doing a collar, instead of just a put option. The purpose of a put is to protect you from a drop in the share price. A call does the opposite. But, since you would still own the stock, you’ll get the upside of a stock hike even without the call.

3. The put is not cheap. I may fuck this up, but here is what I see. A January 2025 put option on ANET with a $290 strike price costs about $35. The stock now sells for about $300. So, you’d be paying $35 for the right to sell a share for $290 in January 2025. To come out ahead, the stock would need to drop by at least $45 a share ($35 + 10). If the stock held steady, then you spent more than 10% of the value of the stock to protect against a drop. And, that is just for January 2025. You would need to keep doing this if you want to keep repeating the protection.

I think you might misunderstand what a collar is. It's not buying both a put and a call, it's buying a put and selling a call. You're basically using the buyer of the call to help pay for your put, and in exchange, they get your upside if the stock soars.

Oops. My bad.

You know the company?? - Is that because you have family/friends in the business and have insider info. That's highly illegal...

Why are you doing this?

If you're worried about the stock going down puke it IMO.

Why not just sell a third of the stock outright?

Stock is at 300 bucks (these are made up numbers so you'd probably sell the 325C to buy the 250 put because puts are generally worth more. That means if at expiration if the stock is over 325 you've sold it for 325 or of it's below 250 you sold it for 250. And these options expire so that means you'll have to reload if both legs are out of the money.

Put another way you are synthetically selling stock.

Options also generate more brokerage FYI. I'd wager if you get knocked out the guy would suggest some other trade to "keep you in the stock."

What the fuck do you mean recommended by Fidelity? Fidelity gives zero fucks about you FYI.

What analyst? Who is he from Adam? Analysts are usually charlatans.

https://www.optionseducation.org/

They are an unbiased resource for retail investors.

Feel free to PM me

You'd be surprised

I love options. I don't think most retail investors (and " financial advisors") understand them.

I actually spent an hour when I was 22 educating my dad's broker on them before I fired him and started beating on my dad to do so as well. Stubborn goat didn't do it for at least five years

Stop losses are for Muppets

Just sell a fucking delta 1 call hoping the theta makes up for the bid ask apread
. A Collar doesn't do shit for selling stock. Collars are of little utility to retail investors. They are IMO for wrapping products or more complex derivatives that people don't fucking understand and buy anyways

Then fucking sell the stock

see above

Sweeney now my brai is fired up... ask this clown if you can sell diagonal call spreads to finance the Puts ...see what he says and if he has to get back to you he's full of shit because that's a better strategy if more complicated

Explain to me what a ''diagonal call spread'' is, so I can ask about it. We are supposed to talk again the week after next because I'm busy next week. My son and his family are visiting. He is a retired VP from Arista. We've never talked about the stock other than him telling me that he has been selling and diversifying since he got the stock as a founding member.

We put in $xxx,xxx at the opening and it's grown to a large amount of money. It's in my IRA, my wife's IRA, and a regular account. My wife asked our Fidelity rep about protecting the money. He set up a meeting with Baker Street Asset Management.

So here we are. We have so much upside that unless the whole market goes down the tubes, I don't think we can come out losing. But it would be nice to protect all these gains. I also think we could just ride it out if there is a downturn.

We really don't need more income. We are fine with what we have now. I appreciate everyone's help here. My wife and I both never thought we'd have this kind of money.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

There is nothing illegal here. We were ''friends and family'' for the initial stock offering but we bought heavily at the same time.

My son is a founding member of Arista and retired as a VP over a year ago. We've never talked about the stock other than him telling me he is always selling and diversifying on a schedule.

Again, nothing illegal has been done.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

Just to update. My wife was just showing me the details and we are up almost 2000%.

It’s been very good to us.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

Why are stop losses for Muppets? Genuine question hoping for a genuine answer.

A diagonal is different strikes with different months so sell September 350 Call to buy the December 400 Call. Do that for a credit and use that money to buy December 200 put. You have to manage depending on how things play out over time. Think of this as a test with the expectation thr guy answers in the moment and doesn't freeze.

Also two other things cash accounts use mixed straddle tax treatment and I'm not sure you can do options in IRAs


https://www.optionseducation.org/...ary/diagonal-spreads

I wouldn't do anything. Just let it ride.

K.I.S.S.

Ya know Jim, there is a lot to be said for that. I don't see any way that things could go so bad that we still wouldn't be in good shape just riding it out. That's what we did with the last downturn and that's how we got here.

I'll be talking to my son next week about this. He has hundreds times what I have so I'll see what he does to protect it.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

The guy from Baker Street Management was explaining how in a rising market he could raise the call price, it was over my head so I really didn't understand it.

He said that with this size acount they would usually do 1/3 for safety, 1/3 for income, and leave 1/3 alone. He showed a chart showing that with a put and call for safety with 1 million, it would still generate 6,000 dollars in the 6 month time. I said that we don't need income so we didn't talk about what he could do for that.

Is this really an income generating tool?

And again, I appreciate your's and everyone else's input here.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

It turns into a market order in a declining market meaning a bad fill...stop limit is the better option IMO but you maybe then you don't get filled

Most of don't understand the difference. Can you explain this one?

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

Your son probably doesn't do anything to protect it.

LIke this but with numbers from : https://www.schwab.com/...-are-options-collars

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Want to finish reading others thoughts before I add mine, but wanted to comment on this. Did Amazon? have not researched company, but do you think they have the growth potential of amazon? they did very good for a while lots sold happy they made good money.. then it just kept going, tesla, apple there are lots of succesful companies that if you got in at ground floor, after a while you could cash out a happy person, and 20yrs later be thinking if I had not cashed out.

So while I agree, in principle (there is a whole nother thread on that, I wont point you to, as my shock title derailed the concept I was trying to express) the fact is everyone is not leaving the market as there is no other game to play. So there will for a while be winners, loser and holds both short and long term.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

As per the link above.. the point of the Call is to offset #3 the proceeds of the call found the put.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Okay, I have fidelity as my main investment place since my 401k was there, they dole out your manager based on assets under management, not sure the connection to baker street, as they fidelity has there own asset management, but not sure how they deal with individual stocks as i don't pay them to manage my money.

Someone else asked, and I think it should always be the start of any financial discussion. What's your goal? whats your long term goal? It amazed me when GM had the buyout and people were trying to figure out if they had enough, how many were clueless, about what they wanted. Some with little money and many kids wanted to leave generational wealth to each kid. They defined it as leaving enough so they could have a simple life and live off interest, we settled on a million a kid, *5 once he saw he needed 5 million that goal was not obtainable in the time he was willing to work, he retired is happy, and will leave some money for his kids.

So are you someone who wants to retire early, are you type A who has to work till your 70? do you want to leave a million to each kid, or If they get anything there lucky? all this will set the understanding of how much do you need, then you can start charting how to get there, what returns do you really need. Its a lot easier to build wealth by avoiding losses, than trying to overcome them. You have ridden this a long ways up, if you park this gain in an index fund, how much a year avg do you need to have the rest of your life like you want? You don't sound like your happy with risk, but road out the last drop. I don't know your age, so no clue what your time horrizon looks like, or the viability of this company, are they still at a point or in an area they really can go tits up by the end of the day? or would it would be a slow decend into hell, and do you have an out planned, start selling some if it drops 10% or something.

Getting into options can protect you, and Windy has gone into (based on the name have not looked at the concept) an only slightly more complex but better? option usage. I agree with what others have said, don't buy a product unless you fully understand it. So either start researching options, I gave link to collars and windy gave one to options in general.

Financial moves really do depend on the individual, whats right for me probably is not right for you. And without knowing you, your financial tollerance and situation its hard to say what to do.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Hey that's what I figured from the name.. Yeah I was wondering the same about options trading in an IRA.

Wait... Its in an IRA, there has been tax talk in this thread, selling will not have any tax implications at the time of sale (the gains well of course) and also with it in an IRA you will have to sell at some point.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

He has already told you, he is deversifying and selling on a schedule. The best way to lock in a win is to sell high.

He keeps selling off x% as it keeps going off, a very sound way to lock in profits and keep money in the game.

Leaving it all in is the High risk move, anything else will decrease risk, but reduce upside if you think there is a huge upside to come. I don't think I could ride a stock that long without selling off some. One of my peace of mind things, is after a stock doubles or so, sell off my initial investment then I am playing with house money. Its aggressive, and your son's approach of selling off a % on a schedule is a less aggressive but same idea and leaves more skin in the game.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

A stop loss tells broker sell my stock if it goes below $100, a stop limit says sell below $100 but no lower than $95... One is a market order,,, just sell or buy I dont care the price, a limit order is buy or sell but only above/ below this price.

So if there is a crash and you said sell at below a $100 a market order could go and you get $10 (now $10 is better than $0) but if it was a blip and 2 min later its back at $95 the limit order would execute.. but if it doesn't go back up your limit will not execute and you risk losing it all.

It matters what your goal is, and do you understand the difference.

another source of learning this https://www.investopedia.com/

In my world if you don't know the difference in a limit order and market order, you should not be playing with options.

If your not able or willing to learn, then spend your time finding a financial person you trust, and feel okay giving them control. --- I might suggest you start with your son, from what you have said so far.

To others point, I met my fidelitly manager recently and I brought up that I looked into setting up basically my own index annuity, using call options, his eyes glazed over and it was clear he had no clue what I was talking about, and thats cause those people hand everything off to NY to do the investing in accounts. (still need to look at why he sent you outside fidelity)

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Okay missed the regular account, so if you divided equally, I guess the options coulg be on your regular account.

Looking at the stock and your 20x comment (2,000%) you got in betweent the ipo in 2014 and about may of 2016. So your looking at its been 8 - 10 yrs.

It seems they sell 1 thing multilayer network switches. In my world that's a limited growth, unless they can expand into other products (risk).

There recent growth has been through acquisitions of smaller companies.

They had some run in's with Cisco which appears they lost, but settled and a 5 yr stand down agreement between the two firms ended in 2023.

Seems the low latency tech (some aquired through buying a company) is there big draw.

from wiki

I don't know what % of the switch market they have, what growth is projected in this market, or how significant a lead they have in low-latency. (all things your son probably knows) but if there is not a lot more market share to be had, I would think there growth might continue and out pace S&P (which they joined in 2018) but I don't know there is much more explosive growth that you have seen over the last 8 yrs.

Now I have only spend about 10 min gathering this info, but from it, I would be looking at taking some gains, to secure my profits.

(if the first x is only a 1 your still sitting with $2million in this one stock. Not sure the rest of your investments but I hope your well deversified, given what you have said about your son, you certainly should be in your 40s if not 50 and should be 50% in conservative (bonds, cds) type investments)

Gotta go drive across state, look forward to catching up when I get back

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

I'm in my 70's and my wife is in her 60's. And there's twice as much as you guessed. We are diversified but this is 80% of our investments. It also doesn't affect us. It's just a big number on a spread sheet. It's fun to have but we already have enough income to do whetever we want. Every expert tells us that we should diversify it but then they are blown away by the growth it's had, and how much these two old people driving around in a Toyota actually have.

I sure wouldn't want to lose it, but I think I could easily ride out a 30 to 40% drop if I think it will rise again. If I do this collar, at some point it will sell and I'll end up with more than 1 but less than 2 million dollars that I don't need and don't know what to do with.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

Lots of thoughts.. I'll let most go... So this is eventually your kids money anyhow (assuming you leave it to him and don't donate to a charity) further reason to talk to him about a plan.

Forget the if I think it will rise again, how much loss are you willing to take and not be imparting negativity to your life?

From what I hear you saying, I would say sell it all and never look at the stock price again. Win, Win.

I mean, you literally are saying you don't know what to do with the money, and yet you want more, with little risk to losing what you have, WHY? lock in the gain, and enjoy the rest of life not worrying about it.

Don't forget if you do the collar, your also going to be paying management fees to the investment company.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

I mean, you literally are saying you don't know what to do with the money, and yet you want more, with little risk to losing what you have, WHY? lock in the gain, and enjoy the rest of life not worrying about it.//

This is where I would be in any advice given to you. I'm about your age but not in your comfort zone, but it does sound a bit like a gamblers rush you are trying to hold onto. DH said it perfectly here, take the huge win and move on from thinking about it anymore. Hell you can get 5 to 7% on the proceeds now with virtually no risk whatsoever, so your egg will get bigger and you can relax and not stress either way. Maybe keep just a little for shits and giggles(like 10% or so) and get on with a less stressful life.


Gonna make a nice inheritance to someone someday, and if you feel like it, you can do some good now in this life if you find something that moves you. Either way it is there and it is yours forever, as Kramer says, SELL SELL SELL!!!!!

Something is off my friend.

To quote myself What the fuck do you mean recommended by Fidelity? Fidelity gives zero fucks about you FYI.


Another poster and I had a similar thought and arrived at the same answer a different way.

https://brokercheck.finra.org/...nericsearch/firmgrid

https://adviserinfo.sec.gov/firm/summary/299027

Baker Street Asset management isn't registered any longer.

This is not meant to be dick but blunt to get your attention....

There is a possibility that people see you as an unsophisticated elderly rube who got lucky and now has a multimillion dollar portfolio they can loot.

Ask your son who runs his money.

ABOVE ALL DO NOT FUCKING OPEN AN ACCOUT THEY HAVE DISCRETION ON OR CAN MOVE FUNDS OUT OF UNTIL THE ABOVE IS SORTED OUT

'There is a possibility that people see you as an unsophisticated elderly rube who got lucky and now has a multimillion dollar portfolio they can loot. ''


I think that just about describes us perfectly, But watch it with the elderly BS, I can still kick some ass!


I also think it is like a gambler's rush. I described it yesterday to my wife as if I was sitting at the roulette table with a big pile of chips because I just kept betting on #32 and it kept coming up. Eventually it has to stop coming up.


This has been a lot of fun, we know or have met most of the leaders in the company including the CEO. We've shared the journey as they founded Granite, then sold to Cisco, then after staying with Cisco for a few years, all leaving together to found Arista and taking their new CEO with them. With the investment at the stock opening, we've got to be part of this experience.


I'll be talking to my son on Sunday. He and my grandson will be driving Upstate with me to spend the night in the house that I built in the forest. Then we'll come back to The City and spend some time there.


This morning I think the best move might be to sell the stock in the two IRA's and put in in interest accounts and keep the stock in the taxable account. It would still keep a good amount ''on the table''.


We will see, and I'll let you all know what happens. And thank you all for your advice.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

How to lose all your money in the market. Option 1, think you understand options and trade until you realize you don’t understand options. Option 2 have someone else direct your option trading when you don’t understand options. I’m not on the front end with this so I’ve forgotten more than I remember on advanced options but my god the number of people who I’ve talked to being like oh I got this letter or advice from someone to place this option trade how do I do it? Is remarkable.

He is suggesting to sell calls with a strike price above the current price of the stock. Then, use the proceeds from that sale to purchase puts with a strike to protect your potential loss.

Read on covered call

Then read on protective put

He is suggesting both of these used together.

Thanks for the confirmation Windy, was just coming on to ask Sweeney if he had the name right, cause Baker Street Advisors appears to be legit, But I CANNOT UNDERSTAND FIDELTY SENT YOU ELSEWHERE...

My warning bells were high so I looked up BSAM and was not sure what I found, so I asked windy to confirm I was reading it right, I guess I was..

If it really is Baker Street Asset Management, Not only dont call them back, but contact Fidelity and ask for a new advisor.. I might do the second regardless cause I dont get them sending you somewhere else, they can do it all, in all states, as far as I know.

I might as my advisor there, if this is in anyway a normal thing for anyone at Fidelity to do.

Now its possible, they are real, and the advice based on what you told them, makes sense (we don't know how exactly you phrased things. But seems overly complex for someone of your age, and financial situation, but I will take simple and a few percent less than complex to gain the last few drops from the squeeze.

Interested to hear what your son says.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

I just checked my wife's notes and it's Baker Street Wealth Mangagememt. Sorry for the confusion.

With the advice here and thinking about it on my run, I think we do need to put a large part of this into interest accounts, probably the IRA's, but I don't think we need to do it right now.

Right now, after all this time, there is a lot of interest in Arista. I think there is still a lot of upside. And right now the economy is still going in the right direction. The only thing I see is that real estate is starting to teeter in Houston and Fla, but unless I'm missing something things are doing fine.

I'm not making any radical changes right away. I'll let you know what my son tells me when I see him.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

I read this and said to myself…. Yep, yep, yep, NO!

Ditch the Toyota. You are old enough to start living life. Unless you plan to keep growing wealth for zero reason…. You already admit you don’t even know what to do with the 1-2 million.

I’m amazed at how many people are unaware, or unconscious about mortality. With every day, you are closer to death and far closer at 60’s and 70’s than someone younger, ignoring bad luck freak accident or sudden onset of terminal disease.

You need to seriously sit back and decide how to spend your last 15 years of your life if you already in your 70’s, because if you make it longer than that, you are lucky and beating the odds. You like gambling?

Well, the Toyota is an 11 month old Rav4, and it's the perfect car for us. Neither one of us wants to ride around in an ostentatious vehicle. The Rev doesn't use any gas when we are at either of our houses and it gets 50 mpg on the 150 mile commute in between. And it offers plenty of comfort. It's really my wife's car and I still have my Nissan Frontier that mostly just sit's in the driveway on Long Island. I want an EV or plug in hybrid pickup. When the right one shows up, I'll be getting it. And, we did sell stock to buy the Rav.

The plan right now is to move the IRA money to interest accounts and watch the rest to see how the economy goes. I don't think either of us would be comfortable with someone else in charge of it.

Right now all indicators are up for Arista. I don't think it's time to get off of it yet, but soon I'll move about half and take it from there.

I have mentioned Arista on ST a couple of times but I don't think anyone took notice. We've also told all our stock buying friends about it and no one else bit on it. Right now it's one of the most searched stocks on Sachs. I think that right now it's finally being recognized for what a strong company it actually is.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

A quick google, yields no results.. The only think with Baker Street that seems legit is Baker Street Advisors

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Good luck, often the time to get out, is when all the people start getting in and drive the price to unrealistic levels. Soon they take their profits and move one, A strong company, doesn't mean the stock will continue at the pace its at. At some point, the price lines up with the value of the companies' profits. Or at least, back when stock was tied to corporation's value, I don't think this is so much the case. Now mostly people chasing the future, and investing in what they think will be hot tomorrow.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

The OP is likely referring to Baker Avenue Asset Management which is part of Fidelity's WAS offering. I believe there is or used to be a similar offering at Schwab but I can't find it online. My understanding is that the big brokers use these independent advisors to craft more advanced or individualized strategies for high net worth clients. As far as I can tell, the collar seems to capture what the OP is asking for. I don't believe in trailing stops or trailing stop limits for this purpose, as most significant movement in stock prices will take place way too quickly (or in extended hours) to be captured by such an order (you'll either get a price way below your trigger or you'll blow through the limit). Additionally, there is a bit more upkeep with those orders, as most brokerage houses will expire a GTC trailing stop/limit order after a few months, whereas the options can last a lot longer. But I do agree that the OP should know EXACTLY what is happening before selecting a strategy. Also, he should probably know who the advisor is. ;) Sorry Sweeney, just busting your balls a little bit there.

No need to apologize. I fully admit that I know nothing about this and that I really don't pay attention to it. My wife does all the financial stuff, and I just go along for the ride.

Do you know anything about Baker Avenue? We are going to talk to them next week and get more specific about this. Does this actually pay for itself? Do they charge a separate fee?

And again, I apologize for the confusion I've caused. I had never heard of this before and my wife had asked the Fidelity guy about ways to protect the money. Do you think this is a good plan?

Thank you

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

You have made a boat load of money and it is all gravy now.

Just let it ride.

It really is a boat load. Right now it's climbing fast and getting to where it's too much to be careless with. It seems like just recently my wife said ''Oh it won't go over 250 and now it's over 300'' so who knows.

We have to do something. I just don' know what. I have a week to think about it, we talk to the guy at Baker Ave next week.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

You said:

"We have to do something".

No, you don't.

Do you buy the extended warranty on a refrigerator?

Muppet

I described it, above, as though I'm sitting at the roulette wheel with a huge stack of chips, and all I've been doing is betting on #32. It just keeps coming up, so I now have almost $5M. Number 32 isn't going to keep coming up forever.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

Windy, now that we got the name right, do you know anything about Baker Avenue Asset Managers?

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

"Corporation's value" has always been a wager on the future.


In the sense that it would be reasonable to recommend to someone who isn't emotionally-bound to the asset? Nah.

But it appears that you are emotionally-bound to the asset in a way that makes you refuse to give up any direct long exposure to it. If a financial advisor is faced with that, and you're telling them "forty percent" as your drawdown tolerance, they're faced with a risk problem and they might not have a lot of options that you'd be psychologically willing to accept.

It's not unheard of for stocks to drop by more than 40% even when the underlying company is doing fine.
Consider, for example, Microsoft from 2000 through 2017. This was a period where they established the Xbox brand, continued their march toward world domination of the home computer space (the early part of this period includes the launch of Windows XP!), and saw them establish the Azure platform and grow it into the second-largest cloud computing platform in the world. Despite the enormous capital expenditures required to do all of these things, this period also saw a doubling of Microsoft's annual profits.
What did MSFT stock do during this span of impressive business success?
It crashed by over 50%, barely ever rose to less than a 40% drawdown across the next eight years, then crashed even more to a maximum drawdown of 74% in 2009, and finally got back to its previous highs seventeen years later. Just look at this dumpster fire.

Now, you could argue that Microsoft had a frothy valuation at the beginning of that period, thanks to the dotcom mania. And it's true that, in 1999, MSFT stock was trading at about 65 times the company's earnings. Which is a lot. For comparison, the S&P500 average is currently about 23.
However.
I'm not sure that I'd use "non-frothiness" as a strong argument in Arista's favor right now. Arista's price/earnings is currently about 47, and although that's certainly lower than something like NVidia (at 79), Arista themselves aren't projecting the kind of extreme earnings growth that NVidia is. If you change the denominator to projected forward earnings, NVidia drops all the way to 30, whereas Arista is still up at about 40. By this measure, Arista is currently valued over 30% higher than NVidia, and about double the S&P500 average.

Now, does that matter? Who knows. It's just a few data points in a vast sea of information, and there's no inherent reason that traders can't start dumping orders one way or another.

My guess would be that you're most likely going to be fine even if you do nothing, but if a >40% drawdown really would be a problem, then the risk of having a problem is also not insignificant.
What's a little quirky about your situation is that you say that you're doing it because you "don't need the money", but that's just as good of a reason to lock in gains and diversify to a safer portfolio. If you can't bring yourself to sell out of a good chunk of your position, a goofy collar strategy isn't the dumbest alternative in the world.

But I'm not a financial advisor, and I don't know enough about your actual risk tolerance to make any kind of solid judgment anyway. For example, is a sustained "40 percent" drawdown an actual tolerance limit, or is it just a number you came up with because the stock has done that before?

The good news is that it sounds like you've got a rich kid, so if you do something stupid and lose all of your money, you can probably just crash on his couch or something.

I don't know them by name.

I would want to fully understand why they want to do this strategy instead of just selling the stock though.

Here is a question....why do you want to own this stock with limited upside? If you don't then personally I'd sell it. (There are a multitude of reasons you may want to keep the stock with limited upside including taxes etc.)

So Jim, are you a put it all on black? the op is 70, has 80% of assets in this single stock, and admits he has way more money then he will need.

Why would you put it at risk? for what reason? Why not diversify, put what you need, safely away, and sure play have fun with the rest, Telling someone at that age, with that much in one stock to let it ride, is beyond, incompetent.

Shit happens, I mean, they have already lost a lawsuit to CISCO, came to a 5yr pause in fighting, but that ended last year. Anything could happen tomorrow, and if something happenend and the stock lost 80% of its value, the OP could quickly find themselves without enough money, and for what purpose?

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Deductions are able to offset gains, not taxes paid on gains. The "50%" being sold in this case consists almost entirely of long-term capital gains, so committing 10% to charity would only drop the tax liability from ~48% of the current market value of the total to ~38%.

(You'd also need to be cautious about max tax-deductible contributions.)

What is this?

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

Why do you say that it has ''a limited upside''? It's still called a Buy or at least a Hold everywhere I see it.

I'm picking up my son and grandson at the Marriott Marquis in Times Sq this morning and going Upstate. I'm excited. I haven't seen them since before Covid and my grandson hasn't ever been there.

We got a couple inches of snow over the weekend. It's going to be in the 30's with blue sky and fresh snow!

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

A response to a post that ike deleted. It was proposing an asset reallocation and tax management strategy.

You're selling a call to buy a put. If you sell a call your upside is limited

Baker Avenue Asset management ---- well Baker Avenue Wealth Management is a real company.


Okay they are the same company, looks like they are going with the 2nd name in more public places.


1 registration for both names and a few more.


https://adviserinfo.sec.gov/firm/summary/132657


At this point, I am tapping out of this conversation,


Several people (3) have all given you the same advice. But as someone said, you appear to be emotionally attached to this stock, and as Warren said


"I can't recall any time in the history of Berkshire that we made an emotional decision," Buffett said. "You don't want to be a no-emotion person in all of your life, but you definitely want to be a no-emotion person when making an investment or business decision."


Good luck, pretty good odds the stock wont crumbly and you will be broke, It will mostly match S&P or maybe more appropriately a Growth index over the next few years. Now is that up or down who knows. I am shoring my self up for a down, as I have what I need, now just make sure I keep it and grow it enough.


Someone else gave you a good breakdown of what your looking at with this stock. You road a startup up to it becoming a significant player, and made lots of money, you should take that win and celebrate, but you seem to want to risk it for an even very less likely huge win.


Remember you have a finite number of days left, you can spend it enjoying life and using your money, or managing your money for gains you give away, if you like managing your money than enjoy it, (doesn't seem to be the case, as your handing off to someone else).

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

That's what my son pointed out to me yesterday. I think the plan going forward is to turn both IRA's into interest accounts and leave the taxable account alone for now. That way we'll have security and still have growth potential. We can talk about it again today, but I think that is the way to go.

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''Sweeney - you can both crush your AG *and* cruise in dead last!! 😂 '' Murphy's Law

So, forget Arista. What’s the best way to short the DJT SPAC without losing everything if the market continues to be irrational? Long term puts seem outrageously expensive for the limited upside.

Piss off fucking wanker...this is an apolitical thread

Certainly there are aspects of politics here, but that's not my question. From a purely fundamentals analysis the DJT SPAC is not worth anywhere near its current market cap, which is virtually undisputed. The political considerations are:

• How much do you believe Trump fans will pump and hold the stock solely because of the association?
• How much do you believe Trump will win the election and promote Truth Social and expand its user base using that position? If the election is 50/50 at this point and he can convert lots of users by using Truth Social as his primary platform, that's a lot of potential upside possibly making the valuation sane.

So you have to answers those valuation questions for yourself (as with any stock pick), but if you still don't believe the current valuation, how do you take the opposite side? I see (post-election) 1/17/25 puts at a strike of 20 for 9.33. So from the current price of 66.22 it would have to fall to 11.67 just to break even which seems insane. I'm not taking a shot at Trump, I just think the current price is ridiculous and want a piece of it.

Its a meme stock.. buyer beware. If you really think its overvalued, short it...

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

That's my concern exactly, to short directly exposes unlimited downside. If big Trump fans (or market manipulators) continue to pump it, I've got to continue to back the short at my expense. I'd love to see a reasonable priced put or other option play, but I haven't found one. I'm a rank amateur, so was just wondering if others saw something else that had potential.

Then stay out.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Windy, just cause people want to play with DJT doesn't make it political. Reddit is alive (sorry forgot the subthread) with talk of buying it up, and then dumping, either before the 6 months or sooner if they change when the Donald can sell. There could be money to be had here, its a legit question.

But its your typical meme stock. Price does not have anything to do with corporate valuation.

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

It belongs in a different thread to keep this unsullied

Well the subject line is Puts and Calls help me understand, the post seems in line with that, actually OP could do some bracketing to limit his downside also. But I am not going through that for a meme stock

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Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.

Sorry - I don't log in too frequently, and didn't see this. At this point you might have already met with them. I am not familiar with the firm at all and don't know their fee structure. In theory, yes, the collar pays for itself. Although you mentioned something about only selling calls on 1/3 of the shares - does that mean the puts will only be for 1/3 of the shares too? Or are you selling calls barely out of the money and buying puts that are WAY out of the money to make up the ratio?

In terms of this being a good idea... I am not an advisor. I was a trader years ago, and have been in the business. I would say that your advisor has two responsibilities here. The first is to provide you with an objective view of risk, reward, and uncertainty, and that will likely steer you to a conversation around allocation and diversification. Barring some significant information you haven't mentioned, I am guessing that you are likely already very equity heavy for someone your age, and that your equity has a lot of exposure to just this stock. I think you know this too. But it is tough to sell a position that has been so rewarding thus far, and one in which you have a sentimental attachment since your son works there. I mean, if you already set for all your future living plus discretionary expenses and are playing the inheritance game, there is some benefit to holding those forever, and giving your fortunate heirs a stepped up cost basis in your taxable accounts upon your demise. ;)

In your position, I would likely skip the collar and just commit to reducing my exposure to Arista by dollar cost average selling at least a healthy portion over the next few years - ideally scaling out the position with a price continuing to rise. But, I also don't have the ability to "value" the sentimental attachment you have to the stock. Ideally, your view of the investment would be dispassionate and objective. But that isn't realistic here, at least at the moment. If selling out of the position brings you more sadness than the potential risk of losing a significant portion of your assets, then I think you need to recognize that and take it into consideration. Also, to be clear, I am not lobbing that as a criticism against you. This is a legitimate question that I think you need to process. (Minimally related anecdote: I have ridden the same bike for the past 13 years despite there being SIGNIFICANTLY better options for me out there for the kind of riding I do. But I derive value from riding the same bike today that I did over a decade ago.) Now maybe the advisor will be able to counsel you in a way that you can see the stock more objectively. But at the end of the day, it is your call.

And that takes me to the second responsibility the advisor has - given your objectives as an investor and whatever direction you go, they need to translate that into an investment strategy that accomplishes what you seek. As you are likely picking up from the resistance you have seen so far, collars are a bit unconventional, and at least in my experience seen by newbie investors as a magic bullet to eliminating all risk at no cost. Hence, I am often skeptical when I see someone who doesn't know how they work asking about them. Given the limited information we have about you though, I think it might make sense in this circumstance. It will give you some peace of mind about the bottom falling out and if your call options are exercised, you will be out of the position, but you might feel a little more positive since that means it would have exceeded your strike price. It is more acceptable to end on a high note for many people.

Good luck!