Transition
VOLT™ Proxy EFR™
Diversify when issuer policy bars hedging the stock itself.
A collar on a permitted proxy floors the position while it migrates out, with sales funded by the collar’s own output.
Illustrative example
restricted company stock → protected on the way out, via permitted proxy exposure
Drawn from a priced proposal, not an engagement. Indicative as of its run date.
The problem
Plenty of concentrated positions cannot be hedged directly. Insider status, blackout windows, or a flat policy prohibition on derivatives over company stock takes the obvious structure off the table. The client is left holding the risk with no permitted way to reduce it.
How it works
Confirm the constraint
What the issuer policy actually prohibits is established first. The strategy only exists because a direct hedge is unavailable.
Collar a permitted proxy
A correlated instrument the policy does permit carries the collar, which floors the economic exposure without a derivative on the restricted stock.
Migrate out, funded by the structure
Shares are sold down on a schedule while the proxy collar holds the floor, and the collar’s own output funds the transition.
What’s inside
Issuer-policy analysis
What is permitted, documented before pricing.
Proxy collar
Floor and ceiling on a correlated permitted instrument.
Funded sell-down
The scheduled migration out of the restricted position.
Who it’s for
- Insiders and restricted holders barred from hedging their own stock.
- Clients under a policy that prohibits derivatives on company shares.
- Advisors who have been told the position simply cannot be protected.
Common questions
How is this permitted when a direct hedge is not?
The collar sits on a correlated instrument the issuer policy allows, not on the restricted stock. The client’s own counsel and compliance function should confirm the approach against their policy before anything is executed.
What is the trade-off versus a direct collar?
Basis risk. Hedges on correlated funds can diverge from the stock — the fund and the position will not move identically, and that gap is real risk the client carries.
Does the client still end up diversified?
That is the objective: the position migrates out on a schedule while the proxy collar holds the floor during the transition.
Request a proposal on VOLT™ Proxy EFR™.
Position-specific analysis and an executable proposal in days. For investment advisers — your client, your custodian, your portfolio.
Partner with us →Also in Transition
VOLT™ Accelerate
Transition
Exit the position tax-aware, on a schedule.
VOLT™ Diversify Now
Transition
Diversify now. Sell later, on the client’s own schedule.
Elsewhere in the suite
Tax-Aware Equity Strategies
Protect & Monetize
Keep the position and the grants. Put the option book to work, tax-aware.
Box-Spread Borrowing
Financing
Borrow against portfolio margin capacity — managed so it does not become a margin problem.
Keep reading
Yayati Asset Management, LLC is a state-registered investment adviser. This material is for investment advisers only; it is illustrative, not an offer, and not tax or legal advice. Examples are drawn from priced proposals, not engagements; figures are indicative as of their run dates and tax outcomes are client-specific. Options involve substantial risk and are not suitable for all investors — read “Characteristics and Risks of Standardized Options.” “Zero cost” means zero net option premium; transaction costs and advisory fees are separate and disclosed. Hedges on correlated funds carry basis risk: fund and stock can diverge. Employee stock options are issuer-governed; monetization is subject to plan terms. Liquidity strategies involve margin and financing risk, and terms depend on the custodian. PLASMA™ is an investment technology platform operated by Yayati LLC; it is not an investment adviser.