You can protect your stock gains and get cash from your stock by using strategies employed by top investment bankers. The techniques can generate six- and seven-figure gains while deferring or eliminating the taxes you'd have to pay if you just sold the stock outright. Deciding whether to lock-in substantial gains is always a problem for investors.Tax-engineered products convert your stocks into cash without selling them and save you up to $150 on each $1,000 that you avoid in capital gains.
• You can use stock derivatives to borrow up to 90% of your stock's value after the stock experiences substantial gains.
• Collars are similar to insurance for your stock -- you can buy put and call options to hedge your position so that you can borrow more money. The put option lets you sell the stock if it falls below a predetermined price. At the same time, you buy an out-of-the-money call option that requires you to sell your stock if it rises in value above a certain targeted price. …show more content…
• When your stock is safely collared on both sides with call and put options, you can borrow up to 90% of its value.
• Selling the call generates just enough income to buy the put option.
• You retain all your voting rights but might not receive dividends, depending on the stock's value when the collar expires.
• Collaring a stock's price too tightly could result in the IRS considering the transaction a sale, and the Joint Committee on Taxation explains that a 15% spread between put and call price is