Eric Metz, Chief Investment Officer of SpiderRock Advisors, joined Keith Black, Managing Director of RIA Channel, to discuss how investors are attracted to tax-aware options overlay strategies.
SpiderRock Advisors was started in 2015 to deliver customized options overlays to the private wealth market regardless of their custodian. In 2021, BlackRock invested in SpiderRock and became its exclusive distribution partner.
The options overlay industry has been experiencing growth due to improved access and technology. Options overlay strategies can deliver unique outcomes with an after-tax mindset that other asset classes cannot. Markets have been generous in recent years, leading many investors to have lopsided portfolio allocations if they haven’t rebalanced out of equity positions. Now that nearly all baby boomers are in retirement, there is a need to de-risk portfolios without incurring a tax liability. Covered call strategies are ubiquitous and can be used as part of a strategy to unwind low-basis positions.
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