Alta Pacific Wealth Management, LLC

A Registered Investment Advisory Firm 27201 Puerta Real, Suite 235 Mission Viejo, CA 92691

Options Trading

Alta Pacific Wealth Management Options Program

Alta Pacific Wealth Management offers an options program to investors seeking to mitigate risk in an all-equity portfolio, capture income by selling calls, and investors seeking to increase portfolio yields.  An investor who is neutral to moderately bullish on some of the equities in his/her portfolio may want to consider a covered call strategy.  Also, An investor who is willing to limit upside potential in exchange for some downside protection may want to also consider this strategy as well.  Another feature using covered calls is that an investor can be paid for assuming the obligation of selling a particular stock at a specified price.  Utilizing options as part of an overall investment strategy can be successful when implemented by a team of experienced professionals.  Option trading is complex and many factors must be researched and considered.  Alta Pacific’s options trading program is lead by a seasoned, experienced portfolio manager with over 35 years of options investing experience.

Versatile investments for Certain Portfolios 

Options are a versatile investment product that can address a variety of objectives.  Generating income for your portfolio, gaining access to an asset class at a relatively small capital outlay, or hedging an existing investment position within your portfolio, are some of the objectives that can be achieved with options trading.  There are many factors to consider when formulating option strategies. A qualified, experienced financial advisor who has many years of experience trading options will be able to design an options program which is tailored for your individual objectives.  Below, is a brief tutorial on options.

Options: An Overview

An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset (typically a stock) at a specific price on or before a certain date.  Like stocks, options are securities that trade on an exchange.  Options are derivatives products, meaning their value is derived from an underlying asset (typically a stock).  Options contracts can also be purchased on bonds, foreign currency or commodities.

Option Types and Strategies

There are two types of basic option contracts: calls and puts. Buying a call gives the owner the right to buy the underlying asset (stock) at the specified price on or before the expiration date.  Purchasing a put gives the owner the right to sell the underlying asset at the specified price on or before the expiration date. There are four basis strategies available to option investors:

1. Buy (“own or go long”) a call

2. Buy (“own or go long”) a put

3. Sell (“write or go short”) a call

4. Sell (write or go short”) a put

Option buyers can choose to either: exercise or sell (close out) the contract if it becomes profitable, or “in the money”; or allow the contract to expire worthless, or “out of the money.” Option sellers are obligated to sell or buy the underlying asset when the buyer exercises the option.  Option sellers want contracts to expire (be out of the money) because they will profit from the sale of the option contract.

This article is a brief summary of options in general.  This article is not all inclusive, and does not describe all of the possible benefits and all of the possible risks of options trading.  Please contact our Managing Director/Lead Options Portfolio Manager, Mark Robles, to discuss if an options strategy is right for you.  Mark Robles can be reached at  (949) 202-9064

For a copy of the booklet; Characteristics and Risks of Standardized Options, and to be redirected to the Options Clearing Corporation website,  please click HERE       Note: once you click the link, you will not be able to return directly to our website.