Concentrated position risk is not limited to a position in a stock. It could also include large positions in unexercised employee stock options. Stock options have become a very important part of the overall compensation package of employees since they offer performance incentives, allow for lower salaries, and can be used as a retention tool due to set vesting periods. While it is possible to use some of the strategies discussed to protect stock options, doing so would likely result in a large margin requirement because stock options are not considered acceptable collateral to cover option positions such as covered calls. 

To help you manage your risk, we offer a Cashless Options Exercise Program where we will extend to clients up to 50% of the value of their marginable shares to pay for the exercise of both Incentive (ISO) and Non-Qualified (NSO) options. Following the exercise, clients may either sell enough shares to cover the loan, or may keep all of the shares and pay interest on the loan. Once we have the shares in your margin account here at Scott & Stringfellow, we can then explore the possibility of using any of the hedging strategies previously discussed, or we can use our Rule 144 and 145 knowledge and experience to assist clients with the future sale of potentially restricted stock. This process allows for a seamless way for clients to unlock the value of stock options.