The options strategies below were presented in the June ASX adviser day in conjunction with MST. This article reviews the success or failure of each strategy and the relative performance against underlying stock where applicable. 

Options strategies are frequently used to manage risk, enhance or replicate exposure with leverage, and express directional views with defined outcomes. 

Here we review the three strategies (and their returns) implemented in June 2025:

• CBA Collar – outperformance vs spot: +7.1%, (return -6.2%)
• FLT Synthetic Stock (Split Strike) – underperformance vs spot: -5.1%, (return +7.8%)
• BEN Bear Put Spread – strategy performance: +345%

Evaluation criteria:

• Directional view of the underlying stock
• Strategy design and objectives
• Comparison of actual performance vs underlying spot performance
• Assessment of success and take-aways

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Strategy 1: CBA Collar Strategy

Key points of the strategy

A collar combines long stock with a protective put and a covered call. The objective was to hedge downside risk while capping upside gains, creating a defined payoff corridor that suits investors prioritising capital preservation over uncapped upside. With CBA near all time highs in June-25, the collar was deployed to protect unrealised gains while enabling investors to hold CBA through to 12 month to obtain the 12 month CGT concession. 

June rationale

• CBA valuation premium: CBA vs peers and banks vs resources.

Implementation details

• Underlying: CBA
• CBA Spot price at open (06/06/2025) $179.90
• CBA Spot price at close (16/12/2025) $156.00
• Realised price with collar: $168.06 vs holding stock only $156.00 
• Collar return: -6.2%
• Stock return: -13.3%
• Strategy outperformance: +7.1%

Strategy construction

Strategy open 

Pricing information taken at approx. 3:50pm, 06/06/2025.

• Sell 1 × $190.00 Dec 2025 Call - Ticker: CBATI8
• Buy 1 × $168.00 Dec 2025 Put - Ticker: CBAYR9

Quoted prices (per share):

• Call price: $5.61 credit
• Put price: $5.31 debit
• Net price: $0.30 credit*

*A small net credit helps offset marginal transaction costs keeping implementation cost neutral.

Strategy close

Pricing information taken at approx. 10:45am, 16/12/2025.

• Buy 1 × $190.00 Dec 2025 Call - Ticker: CBATI8
• Sell 1 × $168.00 Dec 2025 Put - Ticker: CBAYR9

Quoted prices (per share):

• Call price: $0.06 debit
• Put price: $12.12 credit
• Net price: $12.06 credit

Performance analysis

Performance information taken at 10:45am, 16/12/2025.

• Strategy outperformance vs spot: +7.1%
• Commentary: 
  • The collar effectively protected the position during the market move: with spot at $156.00, the realised collar sale price of $168.06 (Collar Close price + Spot price), materially better than spot.
  • The trade-off is explicit: upside was capped above the $190 call strike, but the downside protection was more valuable in this period.
• Success assessment: 
  • The strategy achieved its primary goal of capital protection with a superior outcome vs holding stock unhedged.
  • Considerations: While the opportunity cost of capped upside is real, the net credit structure and the strong downside mitigation made this trade compelling in a risk-aware portfolio. 

Takeaway: In a market that pulled back, the collar’s defined floor delivered tangible protection and superior comparative performance, aligning well with a defensive or capital-preservation mandate.

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Strategy 2: FLT Synthetic Stock (Split Strike)

Key points of the strategy

A synthetic stock (split strike) aims to replicate directional exposure with lower capital outlay and constrained downside. This structure is well-suited for bullish investors who are uncertain around near-term events (e.g., earnings): it can outperform if the stock is weak/flat near-term due to premium received, but will underperform if the stock is neutral/strongly positive.

June rationale

• Oversold, on US volumes concerns.
• Global flight schedules continue to see meaningful growth from pandemic lows as travel demand returns.
• Overseas arrivals and departures to and from Australia are still significantly below the pre-Covid trend growth of ~5.5%

Implementation details

• Underlying: FLT
• FLT Spot price at open (06/06/2025) $13.20
• FLT Spot price at close (16/12/2025) $14.90
• Strategy return: 7.8% vs long stock return: 12.9%
• Strategy underperformance: -5.1%

Strategy construction

Strategy open

Pricing information taken at approx. 3:50pm, 06/06/2025.

• Buy 1 × $14.00 Dec 2025 Call — Ticker: FLTEU9
• Sell 1 × $12.75 Dec 2025 Put — Ticker: FLTRP9

Quoted prices (per share):

• Call price: $0.73 debit
• Put price: $0.88 credit
• Net price: $0.15 credit*

*A small net credit helps offset marginal transaction costs keeping implementation cost neutral.

Strategy close

Pricing information taken at approx. 3:50pm, 06/06/2025.

• Sell 1 × $14.00 Dec 2025 Call — Ticker: FLTEU9
• Buy 1 × $12.75 Dec 2025 Put — Ticker: FLTRP9

Quoted prices (per share):

• Call price: $0.92 debit
• Put price: $0.03 credit
• Net price: $0.89 credit*

Performance analysis

Performance information taken at 2:30pm, 16/12/2025.

• Strategy underperformed vs spot: –5.1%
  • The implemented strategy was successful in providing upside exposure, though due to the strong performance of the underlying, underperformed holding FLT stock. 
• Commentary: 
  • The structure still generated a positive return, but lagged the underlying as expected for strong rallies where delta < 1 and upside is not as linear as stock.
• Success assessment: 
  • The strategy met its objective of providing a lower-cost entry with downside cushion into a slightly positive tape, though it underperformed outright stock.
  • Considerations: For future implementations, alignment to event risk (earnings timing), strike selection closer to at-the-money to increase initial delta, and tenor selection could tighten tracking to spot and improve participation in moderate rallies.

Takeaway: As designed, the split-strike synthetic reduced downside and cost but traded off some upside participation, which is consistent with its purpose in uncertain, mildly bullish contexts.

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Strategy 3: BEN Bear Put Spread

Key points of the strategy

A bear put spread involves buying a higher-strike put and selling a lower-strike put to profit from a decline with limited risk/cost. The payoff is defined: maximum gain is bounded by the strike width minus net debit, and maximum loss is the net debit.

June rationale

• BEN to outline the pathway to ROE improvement. Expectation the update will disappoint investors at FY25 in Aug, with reporting risk in November. 

Strategy construction

Strategy open 

Pricing information taken at approx. 3:50pm, 06/06/2025.

• Buy 1 × $11.50 Dec 2025 Put — Ticker: BENXR8
• Sell 1 × $11.00 Dec 2025 Put — Ticker: BENXP8

Quoted prices (per share):

• $11.50 Put price: $0.32 debit
• $11.00 Put price: $0.21 credit
• Net price: $0.11 debit*

*The defined-cost entry caps risk at $0.11 per share.

Strategy close 

Pricing information taken at approx. 3:50pm, 06/06/2025.

• Sell 1 × $11.50 Dec 2025 Put — Ticker: BENXR8
• Buy 1 × $11.00 Dec 2025 Put — Ticker: BENXP8

Quoted prices (per share):

• $11.50 Put price: $1.07 credit
• $11.00 Put price: $0.58 debit
• Net price: $0.49 credit

Performance analysis

Performance information taken at 2:30pm, 28/11/2025.

• Strategy performance: +345%
• Commentary: 
  • The bearish view played out strongly. With the spread now marked at $0.49, the position produced a large gain relative to the $0.11 initial cost generating a return of 345%.
  • The limited-risk structure amplified the return because the payoff moved closer to the maximum spread width of $0.50 ahead of expiry.
• Success assessment: 
  • Exemplary execution and timing. The trade achieved high return on risk with capped downside.
  • Considerations: As expiration approaches, the remaining upside is bounded by the $0.50 width. At $0.49, there is $0.01 of potential value left to harvest at most, subject to path, time decay, and assignment/exercise conventions. Future deployments should consider liquidity, bid–ask spreads and exit discipline (take-profit targets vs holding to expiry) to avoid slippage.

Takeaway: A textbook example of defined-risk bearish expression delivering outsized percentage returns when the underlying moves decisively lower.

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Conclusion

Overall findings

• Collar (CBA): Excellent risk management. Delivered a realised outcome of $168.00 versus spot at $156.00, outperforming by +7.1%. The downside floor was valuable given the recent pullback.
• Synthetic Stock (FLT, Split Strike): Slight underperformance versus spot (–5.1%). It met the design objective of lower-cost exposure with some downside cushion, but will naturally lag stock in modest rallies.
• Bear Put Spread (BEN): Outstanding success (+345%). Defined-risk structure captured a strong bearish move efficiently.

Take-aways

• Strategy selection must align with market outlook and risk appetite: 
  • Defensive stance: Collar to guard capital with explicit payoff constraints.
  • Cautiously bullish with event risk: Split strike synthetic for cost efficiency and downside buffer.
  • High-conviction bearish: Bear put spread for defined risk and high ROE potential.
• Execution discipline: Monitor rolls, take-profit opportunities, assignment risk, and liquidity to maintain realised outcomes close to modelled payoffs.

Forward-looking considerations 

• Collars: Where outlook improves, consider rolling call strikes higher or unwinding the call leg to restore upside while managing the put floor dynamically.
• Synthetic split-strikes: For “neutral-to-mildly-bullish” tapes, select slightly higher delta calls or tighter put strikes to improve spot tracking; reassess around earnings and IV crush scenarios.
• Bear spreads: Predefine exit criteria (e.g., capture 80–90% of maximum spread value) to lock gains and mitigate gamma/assignment risks late in the cycle.

See the original presentation: High-conviction stock ideas and options strategies | ASX Financial Adviser Day June 2025

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