To you by the world's leading derivatives and securities exchange
Network. Some people have a large single stock position
from a company he used to work at, but
not everyone knows what to do with it. So
today we're going to break down what to do with
large stock positions. Join us now, Gina Deramo
, S V P head of the Options Institute at
CBO Global Markets. Welcome to the show. I've
heard so many people talk about this when they move
to their next job. What are the choices you
have? Gina, if you think your stock is
going to go up after earnings, it's a great
question. We like to encourage everybody to recognize first
that they have three choices. Always in the market
. You can either be in the market and along
the position, you can be short the position or
you can have no position. So when you come
in with an existing portfolio, that's long, encourage
everybody to start by remembering their goals both in the
short run and medium run in the long run before
they make any active decision in terms of how to
position accordingly going forward. On the other hand,
what are the choices if you think your stock is
going to go down post earnings. So if you
think it's going to go up or down based on
a particular event like earnings, we encourage everybody to
understand what they want to do in that medium and
long run. In terms of how they hope to
capture that performance exposure, you can either buy stock
and gain more exposure to capture that performance. If
you believe earnings are going to go up or you
can take advantage positions to capture that downside, move
that you might feel is possible. Depending on your
perspective on the earnings call. How can someone use
options in these situations? Options are just another tool
to express those opinions for being long short or out
of the market altogether, neutralizing some of the risks
. But it's always important to understand both the costs
and the benefits of any position you choose to incorporate
into your portfolio. And we also encourage everyone to
talk to their financial advisor, their tax planner to
make sure that the full comprehension of those choices is
understood before taking any action. I have to ask
because I know this is one of the questions on
so many people's minds. What are some of the
risks and considerations that people should take into account in
this situation? Sure, it's really important to understand
where your break even parameters are as well as your
max gain and loss on each of the strategies you
choose to employ. So when we talk about risks
, the easiest way to understand it is really asking
yourself, where are you most comfortable with your maximum
loss profile? In a lot of cases, it's
not just the premium paid, but when you work
with instruments like options that max loss can actually be
much more significant than most people understand in their early
stages of learning. So we encourage everybody to have
a comprehensive education before employing these tools in their portfolio
. A lot of great information, Gina Z S
V P head of the Options Institute at CBO Global
Market. Thank you so much for your time and
to learn more about options trading visit CBO dot com --> .