Use Case
Cash & New Positions
Whether you're deploying idle cash or buying a stock or ETF for the first time, the question is the same: how much market exposure do you want, and what tradeoff between downside, upside, and income fits you?
Cash avoids market losses but gives up market upside. Buying shares normally gives you full upside and full downside. Parity lets you compare the choices in between.
Less protected
Most protected
Buy Unprotected
Full market exposure
Downside
Full market loss
Upside
Uncapped
Return source
Market participation
Covered Call
Generate income from the shares
Downside
Full downside remains
Upside
Capped
Return source
Option premium + dividends
Buffer
Absorb the first part of a decline
Downside
First losses absorbed
Upside
Capped
Return source
Market participation
Collar
Put a defined limit on downside
Downside
Defined maximum loss
Upside
Capped
Return source
Market participation
Stay in Cash
No market exposure
Market downside
None
Market upside
None
Return source
Cash yield
What could 100 shares of SPY look like?
Illustrative 1-year comparison using one 100-share position.
| Approach | Downside | Upside |
|---|---|---|
| Unprotected SPY | Full market downside | Uncapped |
| Covered Call | Income cushions the first part of a decline | Income + capped upside |
| Buffer | First ~10% of losses absorbed | Capped near +15% |
| Collar | Maximum loss around 5% | Capped near +12% |
| Cash | No market loss | Cash yield only |
Illustrative only. Actual outcomes depend on live option pricing, the chosen expiration, and holding the position through the outcome period.
Start with the investment. Then choose the tradeoff.
Pick a stock or ETF
Choose what you want to own. Option strategies are typically built in 100-share increments.
Compare outcomes
See the downside, upside, income, and cost of each structure.
Build the trade
Take the selected trade to your own brokerage.
Important tradeoffs
- Buffers and collars exchange some upside for downside protection.
- Covered calls generate income but do not provide hard downside protection.
- Option prices and dividends affect the final outcome.
- Cash returns depend on the yield available at your bank or brokerage.
- Listed equity option strategies are typically modeled in 100-share increments.
Model a new stock or ETF position
Choose an investment to see how a standardized 100-share position could be structured with different downside and upside boundaries.
See how concentrated your portfolio is.
After connecting your brokerage we'll automatically identify:
- Concentrated positions
- Cash sitting idle
- Diversification gaps
- Holdings eligible for outcome modeling
Connect your portfolio in under 60 seconds and see how much of your portfolio depends on your largest holdings.
Analysis only. No trades are created or submitted. Illustrative and educational; Parity does not provide investment or tax advice.