Protected equity loans enable you to make a geared investment in shares without being liable for any shortfall between the amount borrowed and the value of the shares held as collateral. In short, falling markets don't have to mean losing capital while you retain the benefits of any increase in the value of the shares and any dividends received during the term of the loan. The capital gains, dividends and franking credits on the protected shares are received. However, if the securities fall in value, your portfolio is protected from any loss over and above the capital employed to buy the protective position.
A Protected Equity Trade must be executed through a margin loan facility. An investor or trader uses a specified amount of their capital that they are willing to risk to purchase put options in a stock. The margin lender will then allow the investor / trader to borrow 100% over the protected position.
For more information on constructing a Protected Equity Trade or a Protected Equity Portfolio, contact a Minc Trading dealer on 1300 610 024