Voyant does not currently model options contracts or options premium strategies directly. However, advisers can still approximate the financial impact of these strategies within a client plan.
A common example is a covered call strategy, where a client generates recurring income from their investment portfolio through options premiums rather than relying entirely on portfolio withdrawals.
Step 1 — Adjust the Investment Growth Rate
Because covered call and similar income strategies may cap some portfolio upside, you may want to adjust the assumed growth rate on the investment account to better reflect the expected long-term performance of the strategy.
To do this:
- Open the investment account.
- Review the account growth assumptions.
- Adjust the growth rate as needed to reflect the expected net return of the strategy.
This helps approximate the tradeoff between recurring income generation and reduced portfolio growth potential.
Step 2 — Model the Premium Income Stream
To represent the recurring options premium income:
- Select the plus button in the bottom-right corner of the Dashboard.
- Select Income.
- Choose Other Income.
From here you can:
- Enter the recurring income amount.
- Set the payment frequency and timing.
- Choose whether the income is taxable or non-taxable.
- Indicate whether the income should be treated as earned income.
This allows the strategy to appear as an ongoing income stream within the plan.
Review Income Growth Assumptions
Double check the growth rate applied to the income stream to ensure it aligns with your assumptions for future premium income.
Verify Timing
Carefully review the start and end timing of the income stream to ensure it aligns with when the client expects to implement the strategy.
Planning Considerations
Because Voyant does not directly simulate option contracts, this approach is intended to approximate the economic effect of the strategy rather than model the underlying mechanics of options trading.
Advisers may choose to refine:
- the account growth assumptions,
- the income amount,
- or the tax treatment
based on the specifics of the client's strategy and portfolio.
Important Note: Covered call premiums can affect the investment’s cost basis over time. To help maintain accurate future tax projections, consider periodically updating the modeled cost basis in Voyant based on actual option activity. A good time to do this is when you update your plan to the new planning year.