One of my favorite tools for concentrated stock is what's known as a Synthetic Variable Prepaid Forward or Synthetic VPF

It’s for those that want:

• Liquidity - get cash from the position without triggering the gain
• Diversification - invest the proceeds into other investments
• Protection - set a floor under a volatile single-stock holding

I think one of the most interesting aspects is the financing itself.

Rather than relying on a traditional loan from a bank, the financing is implemented using an SPX box spread, with transparent pricing and tax deductibility.

There are still margin, execution, and tax risks.

And I think you’ll want to make sure you understand what your options are when the stock price is above the call strike, below the put strike, or in between the two.

But for someone sitting on a large, low-basis concentrated stock position, I think it's one of the most interesting planning tools available because it gives you so much flexibility with the cash you can cheaply create.

For example, using some of the cash to invest in a strategy that does active tax-loss harvesting could allow you to reduce your exposure to the concentrated position very tax efficiently over time.

*A collar is designed to reduce, not eliminate, margin-call risk; a decline may still require added collateral or repayment, and roll and execution risk apply. Advance figures are a percentage of the protected floor (put-strike) value, not market value, and vary with collar width, term, volatility, and liquidity. §1256 treatment and the offset of capital gains are generally expected but not guaranteed, depend on the client's facts, and may be affected by constructive-sale and straddle rules; consult a tax advisor.