Portfolio constructor

How to use it

Start with your portfolio value. The tool then fills in recent market figures from the site's daily archive, which is refreshed once after each trading day ends:

• Sector percentages are VTI's latest breakdown as Vanguard publishes it (monthly). A sector is a group of companies in the same kind of business, such as technology or energy. Vanguard's published numbers are rounded, so they are scaled slightly to add to exactly 100%.
• Prices are each fund's and stock's closing price from the last trading day.
• Option terms for the call sectors are a real listed contract: the one closest to a 0.70 delta (explained below), priced at its offer, the price a seller was asking.

These are end-of-day, delayed figures, not live prices you could trade at. If the archive cannot be reached, the tool falls back to an undated example and says so at the top.

Choose an ETF family, then use Edit beside each sector to change its price and choose ETF shares, long calls, or exclusion of the entire sector. For a call sector you can pick a different listed expiration and strike, or type your own terms. Changing the ETF family clears stock holding weights and loads that family's prices and contracts.

Vanguard describes VTI's sectors using one industry system (called ICB), while Vanguard's and SPDR's sector funds use another (called GICS). The two put some large companies, such as Alphabet and Meta, in different sectors, so the fund buckets are close to VTI but not exact.

Technology and financials start with enough long calls to match their share of the market. The starting contracts are really listed, but their offers are from the last close. Before trading, check your broker's current ask or use the limit price you intend to pay. Offers on thinly traded fund options can be much higher than a price you could actually get.

What does “100% exposure” mean?

A $100,000 stock position changes by about $1,000 when its price moves 1%. An option with the same underlying share value usually changes by a different amount. Delta estimates that sensitivity today. A delta of 0.70 means the option price moves approximately $0.70 for a small $1 change in its underlying share price, other things equal.

Current sensitivity (delta) sizes contracts using price times 100 shares times delta. Share value (notional) ignores delta when sizing. The headline always shows current delta exposure, so a 100% notional allocation is not mistaken for 100% sensitivity. Delta changes with price, time and volatility. Neither method promises the future return of VTI.

Roll or sell, or hold to exercise?

A call gives you the right to buy 100 shares at the strike price. There are two ways to plan for its expiry, and the Option plan setting chooses between them.

Roll or sell before expiry (the default). You sell the calls before they expire, or sell them and buy later-dated ones ("rolling"). You never buy the shares, so you only need the premium, not the strike price. The tool buys enough calls to match the sector's full target exposure. The most they can lose is the premium and fees, shown in the sector editor as a share of that sector's money. Rolling costs another premium each time; that cost is not modelled.

Hold to exercise. You keep enough cash to pay the strike price and buy the shares. That strike cash is set aside (still earning the Treasury bill rate) and any shortfall is shown as additional funding needed. A loss budget, 10% by default, also caps what each sector spends on calls.

Can LEAPS provide full exposure with only 10% downside?

That depends on the actual contract and its price. LEAPS are options with long expirations; they still have time decay, an expiration date and a premium that can be lost entirely.

Under Hold to exercise, the tool treats 10% as a budget for premium plus opening fees, measured against that sector’s target dollars. For example, with a $951,000 technology allocation, that budget is $95,100. It calculates how many contracts match the target and how many fit the budget, then uses the smaller count. If the budget buys too little exposure, it shows the gap.

The displayed “largest premium that fits” holds the entered delta fixed. Finding a cheaper option does not necessarily solve the problem, because a different option has a different delta. The tool uses the listed offer or the terms you enter; it does not model option prices or assume an order would fill at that price.

A fully paid long call cannot lose more than its premium before exercise, plus applicable costs. Exercising buys shares and changes that risk. The worksheet shows the strike cash needed if all calls are exercised. It excludes closing fees, taxes and changes after exercise. The other nine sectors can still lose value. A 10% budget on two sectors is not a 10% portfolio loss limit.

Excluding Tesla, SpaceX or another stock

An ETF owns a basket. Buying it also gives you an indirect interest in every stock in that basket. You cannot delete a stock from the ETF itself.

For each stock you want to offset, enter its weight in every selected ETF, not its weight in VTI. Enter its share price and confirm that you checked the complete holdings. The worksheet adds its estimated dollar sensitivity across your ETF shares and calls, then sizes long puts on that stock to offset it. Whole contracts leave the residual shown in the table. Until the holdings are confirmed, no puts are sized and the result stays provisional. Confirming all zero weights means you checked that the funds hold none.

TSLA and SPCX are prefilled with their last closing price, but not their holdings. The site's archive has prices, not fund holdings, so enter each stock's weight from the fund's own list.

A put is the right to sell 100 shares at the strike price until expiry. It gains value as the stock falls, so it cancels part of the stock you hold indirectly through the ETFs. How much it cancels is its delta: a put with a −0.50 delta moves about 50 cents for each $1 the stock moves, the other way. Each stock starts with the listed put closest to −0.50 delta at the same expiration as the calls, priced at its offer, and you can pick another or type your own.

Puts need no borrowed shares and no margin. The most they can lose is the premium and fees, which come out of the portfolio's cash. The offset only holds at today's prices: as the stock rises the put's delta shrinks and the exposure returns, and as it falls or nears expiry the offset grows. Keeping it near zero means rebalancing.

For permanent exclusions, a fund that excludes the names or a directly held basket is needed. Puts are not a guaranteed substitute for that structure.

Puts on an ETF, or sized your own way

The underlying can be an ETF as well as a stock, and Size the puts by picks how much exposure they offset:

• Share of my ETF positions is the method above. For an ETF you hold, enter the share of that position to offset under its own fund, for example 50% of VGT within VGT.
• Percent of portfolio offsets that percentage of the portfolio's value, for example 10% of a $3 million portfolio is $300,000 of the stock or ETF.
• Fixed dollar amount offsets exactly the dollars you enter.

The last two need no holdings check, because you chose the size. They are hedges rather than exclusions: they lower the retained-market target by the amount hedged and do not change how Redistribute to 100% scales the funds.

Keeping the remaining proportions

By default, excluded sectors and stock exposures reduce the retained-market target. Omitted sectors leave cash uncommitted. Puts on excluded stocks are paid from the same cash. Select Redistribute to 100% to keep the relative proportions of the remaining exposures while targeting the full portfolio value. This increases the gross ETF positions and can require additional cash. The tool reports that funding gap and, under Hold to exercise, keeps each call’s loss budget in force. It will not scale a retained benchmark share below 1%, which would require more than 100 times gross exposure.

Even with matching sector weights, the funds do not reconstruct VTI exactly. Vanguard sector funds and VTI use different indexes. iShares funds have their own definitions and caps; IYZ covers telecom rather than the entire communication-services sector. Sector SPDRs cover S&P 500 companies rather than the full U.S. market. Options availability and liquidity vary by ticker, expiration and strike; selecting a brand does not verify them.

Where the money goes

The Where the money goes table splits the portfolio into ETF shares, long calls, puts on excluded stocks and cash. For each it shows the dollars put in, the share value controlled (for calls, contracts × 100 shares × ETF price) and the delta exposure, the dollars that move with the market today. Calls usually control far more share value than they cost; that is the leverage. Cash sits in 3-month Treasury bills, short-term loans to the U.S. government. It earns the latest 3-month Treasury yield, taken from the site's stored Treasury yield curve, reinvested every three months at that rate until the valuation date chosen under the chart. You can change the rate. Real future bill rates will differ.

How much can a call lose, and how far must it rise?

When you pick a call, the tool shows two numbers next to it.

Max loss is the most that sector's calls can lose: the premium and opening fees, as a share of the sector's target dollars. It happens if the ETF ends at or below the strike on expiration. With delta sizing it is about premium ÷ (ETF price × delta). A $5 call on a $100 ETF with a 0.50 delta buys $50 of exposure per share for $5, so the most it can lose is 10% of the sector. A higher-delta, deeper in-the-money call usually costs more per contract but needs fewer of them.

Rise to break even is how far the ETF must climb by expiration before the calls earn anything after their cost: (strike + premium + fee per share) ÷ ETF price − 1. With the $100 strike and $5 premium above, the ETF must rise 5% to $105. Below that the calls lose money; above it each extra dollar of ETF price is profit.

Maximum drawdown

The drawdown table shows what the whole plan loses on the valuation date if the market falls 10%, 20%, 30%, 50% or 100%, split into ETF shares, calls, puts and interest on cash, next to the benchmark's loss. ETF shares fall with the market. Calls stop losing once the ETF is below their strike, so in a deep fall the plan loses less than the market. Market rise to earn after costs is the move at which the whole plan stops losing money. The same limits as the chart apply: every holding moves together, and it is not a forecast.

Reading the scenario chart

The chart is a simple stress scenario: every ETF moves by the same percentage, and each stock under a put moves by its beta times that percentage. Beta measures how far a stock tends to move with the market: Tesla's, from five years of monthly prices against VTI, is about 1.9, so in a 10% market fall it falls about 19%. Every call and put is valued on one date you choose under Value the options on:

• Today shows an instant move. Nothing has expired, so a put's delta hedge shows directly: as the market falls, the puts gain and cancel part of the loss.
• First option expiration (the default) is when the first option must be sold, rolled or exercised. Options that expire later still have time left.
• Last option expiration is when every option has expired.
• A date I choose is any date on or after the planning date.

An option that has expired by that date pays its intrinsic value: for a call, the greater of zero and the final price minus the strike; for a put, the greater of zero and the strike minus the final price, multiplied by the shares controlled. An option still open is worth what it could be sold for, estimated with the Black–Scholes formula at its listed implied volatility, the market's own estimate of how much the price will swing. Because that estimate comes from the middle of the bid and offer, and you pay the offer, a newly bought option is worth a little less than it cost. The underlying's dividends are included too: a fund's dollar dividends lower what its calls are worth and raise what its puts are worth. That is why a put bought as a hedge looks like a pure cost at expiration, unless the price falls below its break-even, but cancels part of a fall on earlier dates. Premiums and opening fees are subtracted, and ETF gains and losses, their dividends and the interest on cash to that date are added.

Dividends are the dollars each fund actually paid per share over the last 12 months, taken from the fund company (Vanguard, State Street for SPDRs, iShares) and adjusted for any share split. They are dollars, not a percentage: if a fund pays $3 a share and its price falls, it still pays $3, so its yield rises. ETF shares and the benchmark earn them up to the valuation date; calls do not. In a real sell-off volatility usually rises, which makes puts worth more than this estimate.

The dashed lines are the break-evens against the benchmark. Below the downside break-even the plan loses less than simply holding the market, because the calls cannot lose more than their premium. Above the upside break-even it gains more. Between them the plan trails the benchmark, mostly because of the premium spent. Point at the chart to read both lines at any move, or turn on Plan minus benchmark in the legend to see the gap directly.

A flat market can still produce a loss as option time value disappears; interest on the cash offsets part of it.

Also draw one position on its own adds a single position, or all positions of one kind, to the chart, so you can see a call line or the puts next to the whole plan.

Returns by position

Every figure for the plan is built from its parts. Each position is valued by itself first: each ETF share position moves with its price, each call and each put is valued as described above, and the cash earns its interest. The plan's profit or loss is those amounts added together.

The Returns by position table shows, for a market move you choose, what each position cost, what it is worth on the valuation date, and its profit or loss. Return on its cost is that profit or loss divided by what the position cost. For a call or a put the cost is only the premium and fees, so the percentages are large: a call can return +100% or more in a rise and −100% in a fall. Of portfolio is the same profit or loss divided by the whole portfolio. Those add up, row by row, to the whole plan's return. A second table shows each position's return across a range of moves. The common-move assumption can conceal risks such as an excluded stock rising while the rest of its sector falls. It is not a worst-case bound or a probability forecast.

Thirty years of possible markets

The Monte Carlo chart asks a different question from the scenario chart: not "what if everything moves by the same amount once?" but "what could happen over thirty years?"

Each of the 100 runs is one made-up thirty-year history. Every year, each sector gets a random return drawn to match how that sector actually behaved from 1972 to 2025: its average return, how widely its returns swung around that average (the standard deviation), and how much it tended to rise and fall with the other sectors. Technology, for example, averaged about 15% a year with a standard deviation of about 27%, so a year of −12% or +42% was ordinary for it. Utilities swung about 17%.

Two portfolios go through the same 100 histories. The diversified portfolio holds every sector as shares at its market weight. The constructed plan is rebuilt every year the way it is set up today: shares, calls bought again on today's terms and sold a year later, puts on excluded stocks, and cash earning the bill rate. Each sector's yearly return is split into today's dividends and a price change; options are priced on the price. A hedged stock such as Tesla gets its own yearly return: the market's return times its beta, plus a swing of its own sized so its total volatility matches what its options imply. An option that expires in less than a year is bought again at each expiration, with everything the last one paid, until the year ends. Because the markets are the same, any gap between the two lines comes from how the plan is built: mostly the yearly cost of the calls' time value against the interest earned on the cash they free up.

The faint lines are the individual runs; the bold lines are their average. A few very lucky runs pull the average up, so the table's median, the middle run, is the more typical result. The figures are before inflation and taxes, use year-end values only, and assume the next thirty years look statistically like the last fifty. They are not a forecast.

The table One simulated year, position by position takes the plan apart. For every position it shows the return on its own cost across all 3,000 simulated years, how often it lost money, and how much it added to the plan's average year: its share of the plan times its average return. Those contributions add up to the plan's average yearly return, so you can see which positions carry the plan and which cost it. A call often loses money in a year (its median can be negative) yet adds a lot on average, because its good years are very good.

Saving a plan

Everything computes in your browser. This tool keeps inputs in the current tab without putting them in the page address or browser storage. Reloading clears the working plan. Export worksheet CSV saves the entered figures, positions, unresolved inputs and limitations to a local file. No order is sent to a broker.