Use Case
Cash on the Sidelines
Compare staying in cash with ways to participate in the market while limiting downside.
Cash avoids market losses, but it can also mean giving up market upside. Parity lets you compare that tradeoff with strategies that put limits around downside.
Less market exposure
More market exposure
Stay in Cash
Market downside
None
Market upside
None
Return source
Cash yield
Buffer
Downside
First losses absorbed
Upside
Capped
Return source
Market participation
Collar
Downside
Defined maximum loss
Upside
Capped
Return source
Market participation
Unprotected Market
Downside
Full market exposure
Upside
Uncapped
Return source
Market participation
What could 100 shares of SPY look like?
Illustrative 1-year comparison using one 100-share position.
| Approach | Downside | Upside |
|---|---|---|
| Cash | No market loss | Cash yield only |
| Buffer | First ~10% of losses absorbed | Capped near +15% |
| Collar | Maximum loss around 5% | Capped near +12% |
| Unprotected SPY | Full market downside | Uncapped |
Illustrative only. Actual outcomes depend on live option pricing, the chosen expiration, and holding the position through the outcome period.
Important tradeoffs
- Buffers and collars exchange some upside for downside protection.
- Actual outcomes depend on option prices and the expiration selected.
- Option costs or credits affect the final outcome.
- Cash returns depend on the yield available at your bank or brokerage.
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.