Animal Spirits Podcast - Talk Your Book: Hedging Your Portfolio with Options

Starting point is 00:00:00 Today's Animal Spirits Talk Your Book is brought to you by Spider Rock Advisors. Go to Spider Rock Advisors.com to learn how you can help your clients as an advisor use options to de-risk positions, get out of concentrated positions in a tax-efficient manner, head using options. There's tons of different options we'll talk about today. It's spiderrockadvisors.com. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only and should not be relied upon for any investment decisions.

Starting point is 00:00:42 Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. One of the themes we've been hitting on for a while now is just how important demographics is in shaping industries and spending and the economy. all these things. And with the baby boomer generation retiring, there's going to need to be a whole suite of services provided to them in the financial services space. And a lot of stuff that people just haven't had to handle in such a big, overwhelming wave of wealth before. Ben, you mentioned services. So on today's show, we speak about option training strategies. And that's the product. But there's also the service component. So we, full disclosure,

Starting point is 00:01:27 Red Holt's wealth management, we became clients with Spider-Rock advisors, a couple of years ago to help us work through derisking some of our client concentrated positions. And the reason why this is such a needed product and services, the product part, we get into that on the show. But the service part of it, listen, we're not Chicago guys. Like, we are not derivatives traders. And even though a covered call might seem, or just a simple protective put, might seem like a straightforward strategy, there's the trading component of it, the operational component of it, the tax component of it, the rolling component, the ongoing management, and having somebody handled that with like white glove service and be the voice piece

Starting point is 00:02:08 between you and your client to come up with solutions and illustrations and all that sort of stuff goes a really, really long way. You don't want to be guessing on this stuff. Also, I could picture you in one of those like red jackets and having a smoke in between trading out, trading futures all day or whatever, options in Chicago. I could have been you in another life. Camels? Who's to say? Probably. But That could have been you're in another life. But yes, you're right. It's some of this stuff because I feel like we take for granted that so much can be done

Starting point is 00:02:35 on a computer these days and algorithmically done and quantitative, all these rules that you can now set these days. But so much of this stuff, especially when it comes to customization, which is what clients want in need, is that the service component is a huge part of it and knowing what you're doing. You don't want to just do this stuff willy-nilly and hope for the best. Two of the themes that we spoke about in the show today. One is customization, certainly Spider-Rock fits in there.

Starting point is 00:02:58 And the other is advisors outsourcing things where they're not the experts. And this is definitely one of those areas. So here is our conversation with Eric Metz. Eric is the president and chief investment officer of Spider-Rock Advisors. Eric, welcome back to Animal Spirits. I appreciate it, guys. It's been a while. So before we get to option strategies and how advisors are work with them,

Starting point is 00:03:23 congratulations are in order. Black Rock acquired the remaining equity. they did not already own. Yeah, I appreciate it. We're more than ecstatic to join forces, and that deal should be closing here momentarily in Q2. Is BlackRock, well, you don't speak to this. I don't think about BlackRock as like a serial acquirer,

Starting point is 00:03:41 so it really speaks volumes to what you and your team have built. Yeah, you know, it's a good insight. Many, many moons ago when we first embarked upon the partnership with them, it was definitely a build versus buy versus partner dynamic for them, given that they have almost infinite resources over there. And so we had just spent countless hours absorbing advisor feedback and building an infrastructure and technology stack to deliver what we do with customization at scale

Starting point is 00:04:11 on an after-tax basis for a very niche asset class called List of Derivatives. And I think when they started to evaluate that path, it was the time invested that they couldn't replicate. and the first mover advantage that we had and the way that we configured everything to really be able to scale and deliver that value proposition. I'm curious how many people made the dad joke

Starting point is 00:04:33 about the synergies of rock in the name. Had to be a lot. Everybody. Yeah. Had to be a lot of people. There were. There were many, and they still continue because there's more companies that come online that have rock in the name,

Starting point is 00:04:44 and those jokes are not even few and far between, but weekly. So, Eric, just remind the audience who maybe didn't get to listen last time, who is Spider Rock? Where did the idea come from? And how did you get to where you are today? Yeah, you know, it stems from proprietary trading in Chicago and knowing that there are five variables in an option price and one of them can be monetized and that's the volatility component. And then, you know, as private wealth, wealth management started to evolve, as the fintech movement started to evolve, as automation came online as the Tampa arena and SMAs and UMAs, like all

Starting point is 00:05:21 of those trends were in parallel at various speeds. And so combining all of them was really the genesis of me and my co-founding partnership with Spider-Rock, now that being Spider-Rock advisors. And it was countless hours of adhering and appeasing advisors' demands, right? So folks that wanted to run derivatives and models, folks that had concentrated stock, folks that had clients' assets at various custodial venues, being able to incorporate that, a lot of them with scale. But really, you know, the investment works is kind of the cornerstone pillar that they're hiring us for, but the business model to solve the customization and really, you know, deliver this for practice management and scalability is kind of the cornerstone value prop that BlackRock saw it.

Starting point is 00:06:03 I'm curious for your experience in the space working with advisors, how have the advisor attitude towards using options change over time? Have you seen a C change there? Is it slowly, but surely you're kind of picking away at this? How is how has that worked for your experience? Ben, I think that's the industry movement and its totality of which we're. we're one player. The conversations today are very different than even three years ago, let alone five or ten. I think the need for risk management has been preached from the mountaintops. There's a lot of fintech firms that have come online. You guys probably know the leaders in the space better than anybody, but they're highlighting where risk is evident in portfolios.

Starting point is 00:06:40 And the adoption of models is also relevant, right? And so you get those two forces. What's the cornerstone intersection? It's tax. And so that's kind of where we sit is the cross section of all those forces. And granted, our asset class that being derivatives is super niche, which is why we don't have a ton of competitors and why BlackRock pursued us. But at the end of the day, Ben, that conversation, and I'm glad he brought it up, is just, it's a very different today than not even too long ago. I want to talk about some other dynamics that I've contributed to the rise of Spider Rock and the ultimate acquisition by BlackRock. I think one of them is the bull market. And I want to come back to that. I just don't want to forget and ask this question. I'm curious,

Starting point is 00:07:18 Is there any cool Arjun's story to landing your first client? There's a few. And listen, the early adopter clients, like we're forever indebted and in the gratitude speaks volumes. But, you know, I had a few at my old shop. I was a portfolio manager at River North Capital Management out of Chicago. And some of the early adopter clients are that. But I think the eye opening experience was I'll reserve their name just out of confidentiality. But it was, hey, you're kind of pursuing an asset management.

Starting point is 00:07:48 vertical with a tamp just for derivatives. And the market's not big enough for that. So you should be vertically integrated with a tamp underneath the asset management of derivatives solutions. And so it was building out the infrastructure and the tech in a vertically integrated capacity that was kind of the light bulb inflection moment. And that's what the clients were seeking after. Right. So advisors have many, many things on their plates. This concept of outsourcing or OCIO for derivatives started to come on our plate more and more as we were the fiduciary offering. And then when you think about the scalability, folks were using Orion or using InvestNet or using Tamarack or Red Tail. And they had all these different vendors. And none of those vendors could really solve the unique work that we

Starting point is 00:08:33 were pursuing. And so we decided to just keep bolting on functionality and solving it for ourselves out of necessity, frankly. But the client's feedback loop really drove that learning curve. So the reason why I credit the bold market to some of your success anyway is because clients have these legacy positions that have gone up tenfold and even larger in some cases. And there's various reasons why they don't want to sell a stock. A lot of that, it could be taxes, could be affinity or whatever the case it would be. And so I'm not saying absent that, you would not have had success. But there are just so many more people that hold Apple since, you know, 2013 or whatever, and want Spider Rock as a solution to manage around their core holding. So can you talk about

Starting point is 00:09:23 some of the use cases tied to the customization around concentrated securities with the tax aware piece of options in mind? Yeah, listen, I don't think you're wrong in that intuition. Just let's take the Mag 7 to take, you know, the Wall Street. journal headlines and paint them in this narrative. So when folks have the definition of concentrated stock in their head, that definition is nebulous and it's different for everybody, right? So you guys could each have a million dollars of Apple and you might perceive it as too much risk on a Tuesday and not so much risk on a Thursday, right? It's kind of like what side of the bed do you wake up on for some folks? I do think one of the things that is ubiquitous in the industry as simple as

Starting point is 00:10:06 covered calls and where we have taken another step further is knowing how to incorporate covered calls in that bull market to use them in a tax-advantaged way, right? And so people freak out when they sell covered calls and the stock goes through the strike price. Yes, I'm going to get called away. No, you're actually not Mr. Advisor on behalf of Mr. Mr. Client. Let's educate you as to why not. That's derivatives math. But without getting, you know, too technical, it's, hey, when we buy these options back, preventing you from being called away, we can can now use it in a tax loss harvesting metric. And so this notion of directs indexing and tax manage equity has also been a trend in the industry. And so when you start to map the math, but

Starting point is 00:10:47 mostly the narrative around that after tax outcome, covered calls don't become covered calls for income anymore. They become covered calls for what we now classify as strategic liquidation. And so that's one simple use case. And Vatnik, to your point, on the bull market aiding that, like without the bull market, that tax picture, yes, it's there, but covered calls are income. It's re-framing income into strategic financial planning. That's the crossing the chasm and the education that we've taken and evolved. And a lot of that's just data and infrastructure. Being able to do that at scale is, I can have the conversation, but operating it,

Starting point is 00:11:22 conversing around it, having the collateral to disseminate and aid a lot of our clientele is cornerstone to the success. And that's just one use case. And there's many. So the bullmark has definitely contributed. and what I think it's done mostly is highlight what I'll call the drift phenomenon, right? So even if you're direct indexed into the market, when you own SPY or IVV or VOO, you don't see that concentration. When you own those individual securities and you see them in video just flying off the charts every quarter,

Starting point is 00:11:53 like that grabs your attention and it forces a conversation. Do you think that the covered call strategy, as far as options go, for people who aren't in the option space all the time, is that the easiest one for people to grasp? Because my sense is, when can I get a ton of questions on cover call strategies? And because it's essentially, like you said, an income product at its heart, is that easier for people to grasp when they're trying to get their head around these things? I think it's the most ubiquitous use case because it's the one that's conventional for advisor education, like rewind the clock into the early part of your careers.

Starting point is 00:12:25 Everybody's taught that. I don't think it's the easiest to understand because of that tax picture that I just outlined in the real value prop that it delivers. I think the easiest to understand is the insurance metaphor, which is the opposite, right? So a protective put is, I don't want to call it the inverse, but it's pretty close, right? It's taking your thousand shares of Apple and buying 10 puts. And everybody has insurance on their home or insurance on their car. Some even have insurance on their life, but they're concentrated stock, which is arguably their largest asset. They don't have insurance.

Starting point is 00:12:55 Why? Because it's often cost prohibitive. well, if it's cost prohibitive, then can we flip that inversely into using it for their advantage? That's covered calls. That's the income component. And so it's the intercombination of this with financial planning that we've really found ourselves working with advisors on solving unique investment problems that derivatives, frankly, are the only asset class that can solve them.

Starting point is 00:13:20 But covered calls, I think, are often misunderstood. I think protective puts are an easier conversation because it's uniformly. aware in folks' lives. I'm curious when you're putting these positions on, how much do you have to care about the current market environment? Because obviously option pricing can change based on volatility and the price of the underlying security. So I'm curious how tactical you get in overlaying some of these strategies where you say, listen, the protection of this asset makes way more sense. We've got to do this now versus being more tactile understanding the pricing based on the market dynamics. It's a little bit of both. I would say Spider-Rock advisors is never going to take a

Starting point is 00:13:58 tactical stance on the market or on the direction of a securities price. So, Nvidia, Mag 7, valuations, inflation running hot, Fed decision-making policy. Like, we're going to absorb that in our client's lens and incorporate it to applying the right solution set from where we sit. That being said, we will have a stance on where the volatility surface is providing value and where relationships within the volatility service should be outlined and discussed. So low-val environment, insurance is cheap, high-val environment, income is likely more probable or more appetizing.

Starting point is 00:14:35 That's just the difference between protective puts and covered calls, respectively. But I think what you're highlighting, Ben, is our work we view as a core allocation. We view it as improving better investment portfolios, both pre-tax and after-tax. But the unique piece of our asset class that is, I'll call it extremely coveted, is the ability to have more predictable outcomes and have defined utilities of each investor, right? Each investor could have the same exact suitability in their questionnaire, could have the same exact portfolio, could have the same exact estate plan, net worth, income, etc. But their risk aversion will dictate often where our work is better suited for them.

Starting point is 00:15:15 And advisors gravitate towards what works for them in their practice, right? So we're not one-size-fits-all with a strategy. This is very bespoke to clients. probably more bespoke to an enterprise or their advisors. There's clearly a large amount of demand for these sort of cover cost strategies. If you look at just the ETF market, JEPI is the largest active ETF in the world, I believe, and it's a covered call strategy. There's a few threads to pull from that.

Starting point is 00:15:47 One is the growth of the entire industry regardless of Rapper, an ETF versus an SMA versus is a mutual fund. There's another dialogue around like the tax efficiency and the customization that SMAs would predominantly have an advantage over the ETFs. But at the end of the day, I think there's one common theme that has two main trends. One is the demographic of private wealth. We all know where the baby boomer generation has amassed their trillions of dollars of investment portfolios and where we sit today and almost even off five percent, we're still at nominal highs. And so these strategies have an element of risk management. So the natural retirement playbook is to downshift equity risk. And so I think there's a cornerstone theme and

Starting point is 00:16:34 the demand for all of these instruments, wrapper agnostic. I think the other component to this is when advisors look at ETF solutions or mutual fund solutions or direct indexing or tax manager solutions, like there's a there's a value proposition that goes up and down the food chain of the quote unquote wrapper. And I think where we're slotting in and where we're seeing a lot of our clients gravitate is really around the value prop of incorporating this in your after tax components, right? If I have a ticker, yes, it's tax efficient, but the ticker is the vehicle. With an SMA and where we're operating, you know, the value proper, the investment of hedging

Starting point is 00:17:12 and volatility management is still there. That can be, you know, parapassoup. It's really around the after tax outcomes and delivering that customization. So it takes a little bit more education and focus from an advisor of their clients. But at the end of the day, the value props start to come through in those second and third order dialogues. So I think that the customization piece is huge for advisors. And you mentioned working in concert with direct indexing. And I think that's probably one of the misnomer's there is that people assume, well, technology takes care of it so it's easy.

Starting point is 00:17:41 But we know firsthand that managing that they're sort of SMAs in a direct indexing platform, you have to have advisors and operations people that know what they're doing. So your team at Spider Rock is working hand in hand with advisors to figure out, okay, we have these tech exposures and tech loss harvesting on direct indexing. How does that work in concert with the options? How does your team pull that off? Yeah, it's it's evolving. It's frankly, I think the quest of what we're seeking to do with BlackRock now on the other side of the acquisition is really solving for the easy button, right? It's like how do advisors scale this? And it takes resources.

Starting point is 00:18:16 it takes collaboration and frankly up until now from where we sat we were just the options vertical so i'm always agnostic to everything at the underlying portfolio whether it's mutual funds whether it's models whether it's direct indexing um and what i think the industry and advisors have told this this is solving for this in one account right call it the whole portfolio right you have your asset allocation strategically defined by an advisor maybe a home office ceo maybe consultant whatever whatever it the enterprise dictates on behalf of a client and their suitability, but now they need to operate and scale it. And so now the more after-tax components you weave in, the more data synchronization you

Starting point is 00:18:59 need. And so this is where the industry is going and what I think we're attempting to solve with my new partners at BlackRock around the whole portfolio and all asset classes with us just being the derivatives component of it. So that's the biggest challenge we see, but also the biggest opportunity. Do you find yourself working with advisors on the behalf of clients more to solve the concentration risk issues around some of their securities or at the portfolio level as a whole? This varies by, I'll call it the life cycle of my client. Every client of ours uses us for concentrated stock.

Starting point is 00:19:35 We don't have a single client that's ever come on board that we've never addressed one unique client instance. What I think happens, though, Michael, as folks start to get more immersed in our way, work and they start to have not one but 10 clients, not 10 but 20, all of the stuff at the portfolio level becomes relevant, right? The biggest barrier to entry here is operations. It's not investments or investment know-how. And so when you think about dedicating the time for somebody with $25 million of concentrated stock of Apple, that same application can now be applied to a portfolio of low basis things. And so this goes back to our earlier conversation around what is a concentrated stock.

Starting point is 00:20:15 It's just a low basis, something. And so we always like to frame that dialogue with, you know, Mr. advisor on behalf of Mr. Mr. Client, like, if taxes were zero, what would you do? You start getting real interesting conversations that come up and how our work can provide value. I don't want to get into like the nitty gritty IRS stuff, but like what are some of the main benefits tax-wise when it comes to trading options? I think the biggest is being able to reshape the risk in a portfolio and not incur an instantaneous. friction of capital gains liabilities, right? So take your 80-20 client who just entered retirement. If there were no tax frictions and they didn't have any qualified accounts to de-risk any

Starting point is 00:20:53 equities, then selling those equities right now would probably force a tax conversation. So if I can synthetically do that, selling calls by inputs, whether it's an Apple, Amazon, Nvidia, or the S&P, or frankly, on mutual funds, regressed into the S&P, then I've instantaneously solved the investment objective with no tax friction. And so, that conversation is evident in a concentrated stock. It's less evident in a portfolio construct. But folks, the more they work with us, start to see the power of that math, really working for them and their clients. Right. So that glide path, I need to go from 80, 20, 30, 30, or 60, 40, do it when we're using options instead of selling 10 to 20% of my stocks. Bingo. That's it,

Starting point is 00:21:35 right there. And that really scales for folks. And we can take it, you know, a step further into, what I'll call a risk transfer, right? We had clients last week trying to, as the growth and the momentum showed some evidence of potentially unwinding, let's take my growth and go to value. We've been waiting for this. I don't need to get any greedier in this factor. Let's downshift growth and start to insert value. And derivatives can do that almost instantaneously.

Starting point is 00:22:02 How does a current interest rate environment impact these strategies? We get this question a lot. So options instantaneously reflect. reflect the financing of all risk-free rates. That's how options are priced. And so unless you're trading really long-dated options, like two, three, four years, there's no equivalent duration element to them. It's an options variable called Roe to get technical, but like it's, I don't want to say

Starting point is 00:22:29 it's moot. Interest rate volatility spawns over into equity volatility. So volatility is present there. But the actual interest rate sensitivity for our work depends on strategy. but for a lot of the strategies, if we're inside of a year and their maturities, it's, I don't want to say you're relevant, but it's not a, it's not a focus. So it's almost like the borrowing and the lending component like cancel each other out, essentially, right? Is that the way we're looking at it? So it doesn't, is that a net impact?

Starting point is 00:22:55 It has more to do with the fact that all the market making community is pricing in interest rates into their models instantaneously as they're, as they're moving around. And that flows through to the exact mark to market price of each individual option. And so if you're levered, that's something that you're going to want to focus on. But none of our work is levered, right? A thousand shares of Apple, they're getting 10 short calls. If those calls are in two or four months, the interest rate sensitivity to that client's portfolio for those options is, I don't want to say de minimis, but it's low.

Starting point is 00:23:29 That's true. That makes sense. I have a two-part question. Is there, I know there is, talk about the threshold of a company's size at which you guys operate. And then part two to this question would be, let's say that somebody has, let's say that somebody is a founder, for example, and they have a $100 million position in a stock that has a two and a half billion dollar market cap. Like, it's a lot. Can you potentially help make a market?

Starting point is 00:23:57 Let's bite those off one at a time, given your two-part framework. Number one, the size of the security is really whether or not there are options listed, which is an industry. standard regulated kind of set of criteria that each company must meet to be listed on the exchange and then to have options listed subsequently thereafter. So we're just going to follow those. The next piece of your question is founder with respect to what size of the float or what percentage of the float they are, can we make a market? In other words, if there weren't listed, if there weren't listed options, is there anything

Starting point is 00:24:33 that you can do to help somebody with a really concentrated position? where it's like working directly with market makers i'm making i'm talking out of my ass i don't know if this like a real thing yeah no i get we get this a lot um we will never make a market number one uh we're always a fiduciary to our clients that's that's the first point the second point we can petition and lobby on their behalf to the exchanges to get options listed but they still have to go through the set of criteria now we just have a demand that may or may not be known but if they meet the criteria then we can petition to get it listed that goes through you know standard industry regulated protocols.

Starting point is 00:25:07 The other element of your question is it's really a function of the liquidity. So sometimes $100 million of a $2 billion company, let's call that 5%, is an outsized position that would never be able to undertake that liquidity. There are other instances where that's not the case at all where they're high-flying trading stock. So the market cap of the stock is not actually what we care about, care about the average daily volume of the stock with respect to that market cap because that's that's who's coming in and out because that's what the market makers will need to to hedge themselves with um with whatever

Starting point is 00:25:44 we're doing on behalf of our clients so again like come full circle we're going to be a fiduciary and guide our clients where we best see fit where we can provide value and if liquidity is the constraint like we'll face the music so maybe talk about that part of it a little bit more when I'm what I'm talking about specifically is the relationship between spider rock and the advisors because because most advisors, unless like by accident where they have a background in options trading, are not necessarily experts in a lot of the intricacies of these different strategies to best serve the needs of the client. Can you talk about how you work with the advisor and their client to come up with the best

Starting point is 00:26:19 solution? Yep. So a lot of this is the genesis of some of the business model at its origin, which is what used to be DOL, which is now reg B.I has a fiduciary standard. And historically speaking, folks, especially. if they came from the bulge brackets or the wirehouses, they were accustomed to having a derivative's desk, right? Show me pricing is a conversation that historically, you know, took place.

Starting point is 00:26:43 Pricing is real time. The stuff gyrates around. And we are building all of our strategies to sit as a sub-advisor. So legally and the regulators would look at us now BlackRock as a sub-advisor to our clients. And in that capacity, we're working on behalf of the RIA or the family office. have a half of their end client. Now, we do have some dual contract where we call direct business. The minimums are higher and has a different element of standard. I won't get into the details, but we're fiduciaries in both capacities. And we're having sat on the other side of the desk,

Starting point is 00:27:18 you know, trading in a proprietary capacity for however many dozens of years. We're using that to aid our clients, visibility, know-how, but we're performing all of that work on their behalf and sitting on the same side of the table as them. So we're a sub-advisor and a lot of of capacity we're a direct advisor and others but the common theme between both is really adhering to that fiduciary standard we've talked about um glide path taking down your allocation hedging tax awareness on concentrated positions any other customization that you do for clients that that exists outside of that i think our most unique strategy for lack of a better phrase is is a solution we call exchange fund replication so the genesis of this is folks have have embarked

Starting point is 00:28:01 upon exchange funds to solve a common investment objective, which is I have too much concentrated risk in a security, it's called Apple. And instead I want diversification, let's call it the S&P. And so about five or six years ago, clients started calling us saying, hey, team Spider-Rock advisors, I just got a call from the two largest providers of exchange funds, and they're rejecting my Apple. They won't take any more Apple. And so this kicked a process off here to say, can we solve the same investment objective. I don't want as much Apple risk instead I want diversification. Can we do that with listed derivatives? And so the question is first and foremost, the answer is yes. The second question is do we provide after tax value as we model through all these scenarios and simulate them? That answer

Starting point is 00:28:44 also became yes, but we had to really commission and put a research product together. And so the exchange fund replication, ironically today is the catcher's mitt because that's where all the options liquidity is for the MAG 7, a bullet pointed at that, because those are the same securities coincidentally enough that are being rejected by the exchange funds. And so we hedge out the concentration risk and then we re-risk you, much like risk parity would, into an index of your choosing. So it solves a lot of the same objectives, but it really does it in a daily liquid, transparent tax loss harvesting capacity that advisors and clients have really gravitated towards. So it's probably our most novel solution. Albeit it's probably the most sophisticated because it's got a few more moving parts,

Starting point is 00:29:28 but the demand curve here and kind of where the industry sits with exchange funds has been quite large, and we continue to see tailwinds there. So, Eric, as we look forward, what trends that are currently in place do you see extending or maybe what's a head fake? And where does the future for option strategies with regards to advisors and their clients go from here? It's a great question. It's what we think about daily. I don't think this trend is going anywhere. In fact, I continually think it's going to increase. The wallet share of options-based strategies, the wallet share of advisor adoption is still in the early innings.

Starting point is 00:30:02 I do think the trend that can pick up some speed here is the adoption of options in models. And so if you think about the growth of models and UMAs in general over the last decade, that's been a technology-aided growth curve. I think incorporating the asset class of listed derivatives in that historically already defined growth curve is one of the things that we're very, very keenly focused on. And to do so requires a fair amount of infrastructure and technology to

Starting point is 00:30:31 solve. And we feel very confident that we will pursue that and deliver that. And we have the clients that have kind of given us the anointed path to do that for them. So that's the work ahead. And I'd say the other theme here that's driving more and more is just tax-aware investors, right? So thinking about things on an after-tax basis and derivatives are not necessarily understood well enough to decompose that value proposition. And, you know, we hope to really shed that light and further, you know, be an evangelist in that education because that's the key gap that I think is being closed at the industry level. Where do we send advisors to learn more? Our website's a good spot. www.spideracadvisors.com. If folks have a blackrock

Starting point is 00:31:19 relationship. Any personnel at BlackRock that you work with should be able to find our work and navigate their organization to us. And, you know, at the end of the day, like there's tons of industry literature, you know, describing the value prop, CBOE, OIC, OCC, those are the industry staple leaders. Perfect. Thanks, Eric. Thank you, guys. Okay, thanks to Eric. Great conversation. Remember, check out spiderrockadvisors.com. If you're an advisor, I want to learn more, email us, Animal Spirits at ThecompoundNews.com. See you next time.

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Animal Spirits Podcast - Talk Your Book: Hedging Your Portfolio with Options

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