Transition
VOLT™ Shield + Diversify Now
Diversified on day one. The sale, and its tax, happen later.
Shield floors the position, then an exchange-cleared SPX box spread converts portfolio margin capacity into cash. The client is diversified on day one; the concentrated position stays floored and the decision to sell it stays theirs. YAM is not a lender.
Illustrative example
floored concentrated position → portfolio diversified immediately, sale deferred to the client’s own schedule
Drawn from a priced proposal, not an engagement. Indicative as of its run date.
The problem
A client who wants to be diversified but will not trigger the tax usually gets pushed toward a securities-based line sized off gross market value. That number looks generous until the position falls and the call arrives — which is exactly when the diversified portfolio has to be sold to defend the concentrated one. The liquidity was never sized to what survives a drawdown.
How it works
Floor the position first
The Shield collar goes on before any borrowing. The floor is what makes the financing safe to carry, so it is not an add-on.
Raise cash on the exchange, not from a bank
A short SPX box spread is an exchange-cleared options position that functions as financing. No lender to underwrite, no covenant package, and the all-in cost tracks institutional rates. It is financing, not a return-generating position.
Diversify on day one
The proceeds go to work in a diversified portfolio immediately, while the concentrated position stays floored and unsold.
What’s inside
Protective collar
The Shield floor-and-ceiling structure on the concentrated position.
Short SPX box spread
The exchange-cleared position that carries the financing.
Stress-tested sizing
Advance sized against margin headroom after a drawdown, not the headroom showing today.
Diversified portfolio
Where the proceeds are invested, managed under the same mandate.
Who it’s for
- Clients who want to be diversified without realizing the gain today.
- Advisors uneasy about a securities-based line sized off gross market value.
- Situations where a tax event now would cost more than the financing.
Common questions
Why a box spread rather than a margin line?
A box spread is exchange-cleared and priced off index options, so the cost tracks institutional rates rather than a retail lending desk, and there is no lender who can reprice or withdraw the facility. The risk is not eliminated: it uses margin capacity, so a portfolio decline reduces headroom.
Is the box spread generating returns?
No. A box spread is financing. It raises cash against portfolio margin capacity and does not hedge anything or produce a return. The hedge is the collar; the return comes from the diversified portfolio the proceeds buy.
Is YAM the lender?
No. YAM manages the mandate and helps the client access and manage liquidity through an exchange-cleared options position. Terms depend on the custodian, and liquidity strategies involve margin and financing risk.
What is the risk?
Two layers. The borrowing uses margin capacity, so a portfolio decline reduces headroom and boxes must be rolled at prevailing rates as they mature. The collar caps upside on the concentrated position above the ceiling.
How is this different from Box-Spread Borrowing?
Box-Spread Borrowing raises cash against the portfolio’s existing margin capacity and hedges nothing. This structure floors a specific concentrated position first, then borrows, so the position securing the plan has a floor under it.
Request a proposal on VOLT™ Shield + Diversify Now.
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™ Shield
Transition
The same exit, with a floor the whole way down.
VOLT™ Sidecar
Transition
The hedge runs in a separate account. We never trade the client’s shares.
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.