Use of Option Strategies in Portfolios - Video Transcript – Filmed: March 4, 2014 Important disclosures provided on page 2.                                                                                                                                                                                1        

     

Use of Option Strategies in Portfolios Video Transcript

An interview with:

Kevin Weigel, CFA Alternative Investments Strategist    What is the purpose of utilizing option strategies within an investment portfolio? Potential opportunities exist for clients to customize their exposure to existing investment holdings, or even to replace current holdings with lower volatility strategies that still offer the benefits of diversification. We have access to multiple tools to help alter the risk/return tradeoffs of individual securities, asset classes or entire portfolios. Depending on client goals and objectives, we can deploy option strategies that are designed to help protect against the potential risk of loss, to generate income or some combination of both. We can also create customized securities that provide pre-determined payoff profiles to broad equity, bond or commodity market indices. Use of these strategies may help a client gain greater control over the risks and potential returns of their investments. What are the risks involved? These strategies always involve tradeoffs. Similar to an insurance premium, option strategies will cost something to implement. That cost may be in the form of an up-front payment or can be in the form of limiting the potential price appreciation in the future. We can help tailor risk and return exposures to fit individual client needs. Clients should contact their Wealth Management Advisor to further explore these strategies.

Use of Option Strategies in Portfolios - Video Transcript – Filmed: March 4, 2014 Important disclosures provided on page 2.                                                                                                                                                                                2        

IMPORTANT DISCLOSURES

This information represents the opinion of U.S. Bank and does not constitute investment advice and is issued without regard to specific investment objectives or the financial situation of any particular individual. Since economic and market conditions change frequently, there can be no assurance that the trends described here will continue or that the forecasts will come to pass. These views were presented on March 4, 2014 and are subject to change at any time based upon market or other conditions. The information presented is for discussion purposes only and is not intended to serve as a recommendation or solicitation for the purchase or sale of any type of security. U.S. Bank and its representatives do not provide tax or legal advice. Each individual's tax and financial situation is unique. Individuals should consult their tax and/or legal advisor for advice and information concerning their particular situation.

Past performance is not a guarantee of future results. Alternative investments very often use speculative investment and trading strategies. There is no guarantee that the investment program will be successful. Alternative investments are designed only for investors who are able to tolerate the full loss of an investment. These products are not suitable for every investor even if the investor does meet the financial requirements. It is important to consult with your investment professional to determine how these investments might fit your asset allocation, risk profile, and tax situation. Options involve substantial risk and are not suitable for all investors. Prior to buying or selling an option, investors must receive a copy of "Characteristics and Risks of Standardized Options." Copies of this document may be obtained from an investment professional, from any exchange on which options are traded, or by contacting The Options Clearing Corporation at One North Wacker Drive, Suite 500, Chicago, IL 60606 (phone: 1-800-678-4667). Equity securities are subject to stock market fluctuations that occur in response to economic and business developments. Investment in fixed income debt securities are subject to various risks, including changes in interest rates, credit quality, market valuations, liquidity, prepayments, early redemption, corporate events, tax ramifications, and other factors. Investment in debt securities typically decrease in value when interest rates rise. There are special risks associated with an investment in commodities, including market price fluctuations, regulatory changes, interest rate changes, credit risk, economic changes, and the impact of adverse political or financial factors.