What is a concentrated stock position?

A concentrated position is any individual equity investment that gives you pause, keeps you awake at night, or that will cause additional problems if you try to diversify it. We typically consider positions above 20% of your portfolio as concentrated, especially when your employment is also tied to the same company.

How can I diversify a concentrated position without paying massive taxes?

We use three main strategies: Hedging with derivative overlays to reduce risk immediately without selling, direct indexing to create tax losses that offset gains from your concentrated position, and exchange funds to instantly diversify highly appreciated shares without triggering immediate capital gains tax.

Can I manage concentrated positions myself?

While technically possible, concentrated position strategies require specialized knowledge and frequent management. Common mistakes like letting positions get called away prematurely can trigger large unintended tax bills. These strategies require active monitoring and professional implementation.

What are the three strategies Prospero Wealth uses for concentrated positions?

We use hedging with derivative overlays (puts, collars, covered calls) to immediately reduce risk, direct custom indexing to build diversification while generating tax losses, and exchange funds to instantly diversify highly appreciated shares into index-tracking portfolios without triggering capital gains.

What is a Variable Pre-Paid Forward?

A Variable Pre-Paid Forward allows you to receive 75-90% of your stock's value upfront without actually selling it, deferring capital gains tax. You agree to deliver shares at a future date, with the exact number determined by the stock price within a defined collar structure.

Concentrated Stock Position Management

Privacy Policy

Forms ADV & Registration

Form CRS

Business Continuity Plan

7724 35th Ave NE #15170

Seattle, WA 98115-9955

(971) 716-1991

hello@prosperowealth.com

Prospero Wealth, LLC is an Investment Adviser registered with the SEC, principally located in the state of Washington. All views, expressions, and opinions included in this communication are subject to change.

Designed by Slices.Design

Privacy Policy

Forms ADV & Registration

Form CRS

Business Continuity Plan

7724 35th Ave NE #15170

Seattle, WA 98115-9955

(971) 716-1991

hello@prosperowealth.com

Prospero Wealth, LLC (“PW”) is a registered investment advisor offering advisory services in the states of Washington, Oregon, California, and in other jurisdictions where exempted.

Designed by Slices.Design

Privacy Policy

Forms ADV & Registration

Form CRS

Business Continuity Plan

7724 35th Ave NE #15170

Seattle, WA 98115-9955

(971) 716-1991

hello@prosperowealth.com

Prospero Wealth, LLC is an Investment Adviser registered with the SEC, principally located in the state of Washington. All views, expressions, and opinions included in this communication are subject to change.

Designed by Slices.Design

Get the Concentrated Position Playbook

Get the
Concentrated Position Playbook