Quick answer
How do you generate income from a concentrated stock position without selling?
The main ways are selling covered calls against the shares, lending the shares, borrowing against them, or contributing them to a structure that runs an income overlay for you. A professionally managed options overlay on a volatile large-cap stock can target 10% or more a year, in exchange for capping some upside in strong rallies.
Key takeaways
- 01Most mega-cap tech stocks pay dividends under 1%: a $5M position may pay less than $50K a year.
- 02Option premium turns the stock's volatility into cash flow while you keep the shares.
- 03Borrowing produces cash, not income: interest costs usually exceed what the cash earns.
- 04Embark (§721 SPV, $0 tax at contribution, 3-year lock-up) and Income+ (Schwab managed account, no lock-up) both target 10%+.
| Typical mega-cap dividend yield | Under 1% |
|---|---|
| Options overlay target | 10%+ a year (not guaranteed) |
| Main trade-off | Capped upside in strong rallies |
| Embark | §721 SPV, $0 tax at contribution, 3-year lock-up |
| Income+ | Schwab managed account, no lock-up, no deferral |
The Short Answer
How do you generate income from a concentrated stock position?
There are four main ways: (1) collect dividends, which for most growth stocks is under 1%; (2) sell options against the shares, mainly covered calls and sometimes cash-secured puts, which is how most 8–12% targets are built; (3) sell the stock and buy an equity income fund, which triggers capital gains; or (4) use a managed structure, such as a managed account (Income+) or a §721 SPV (Embark), that runs the income strategy for you. Only the last two keep the stock and avoid a taxable sale on day one.
Chart
Annual yield on $1 of capital, by source (2026)
The Problem
Why does a big stock position pay so little income?
~0.02%
NVDA dividend yield (mid-2026)
~0.3%
META and GOOGL dividend yields
$10K
Typical yearly dividends on $5M of mega-cap tech
Concentrated holders are usually rich on paper and income-poor. Selling to buy income assets would cost a third of the position in tax in a high-tax state. Borrowing against the shares costs interest instead of earning it (SBL vs. Embark). The options below keep the position and create cash flow from it.
The Methods
What are the five ways to earn income on a concentrated position?
| Approach | Typical yield | Keep the stock? |
|---|---|---|
| Dividends only | 0–2% | Yes |
| DIY covered calls | Varies widely; often 5–15% gross | Yes, until shares are called away |
| Sell and buy an equity income ETF | ~7–12% on what's left after tax | No |
| Income+ managed account | 10%+ target | Yes; no lock-up; no tax deferral |
| Embark §721 SPV | 10%+ target | Yes; 3-year lock-up; tax-deferred contribution |
Covered calls are the engine underneath most of these. The mechanics, and why higher volatility means higher premium, are explained in How Option Premium Income Works.
Run Your Numbers
What could your position pay you?
Calculator
Annual income at different yields
Enter your position and compare dividend income with an income-strategy target.
Income at the target yield
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Dividends you get today
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Extra income per year
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Targets are not guarantees. Option-based income caps some upside and can vary year to year.
Over a Decade
How much income does $5M generate over a decade?
Chart
Cumulative income on a $5M position, income withdrawn each year
Where Embark fits
Your biggest asset pays you almost nothing. Change that.
Pick your ticker and see what a 10%+ income target looks like on your position.
- Targets 10%+ annual income without selling a share
- Embark: $0 tax at contribution through a §721 SPV
- Income+: same strategy team, no lock-up, your own Schwab account
Run the numbers
Live prices · takes under a minute · no obligation
The Trade-offs
What does income cost you?
Benefits
- Turns an idle position into cash flow
- Premium is highest when the stock is most volatile
- No sale required to start
Costs
- Caps some upside in sharp rallies
- Option income is usually short-term capital gain
- Shares can be called away in DIY programs
Embark vs. Income+
Should you use Embark or Income+?
| Embark | Income+ | |
|---|---|---|
| Target income | 10%+ a year | 10%+ a year |
| Structure | §721 SPV | Managed account at Schwab, in your name |
| Tax at entry | $0 (in-kind contribution) | $0 (no transfer of ownership) |
| Tax deferral | Yes | No; income is taxed as earned |
| Lock-up | 3 years | None |
| Best for | Large unrealized gains, tax-sensitive | Flexibility-first; gains already taxed or modest |
Learn more on the Income+ page or in The Embark 721 Strategy.
Go Deeper
Where should you go next in this series?
Single-stock concentration vs. indexing
The data on why one stock is riskier than it feels. Read
How option premium income works
Volatility, strikes and what 'annualized' hides. Read
Diversify without selling shares
Every method that avoids a taxable sale. Read
Strategies for founders and executives
Matched to your goal and constraints. Read
Equity income funds vs. a single-stock overlay
JEPI, QYLD and the tax cost of switching. Read
How a 10% yield target is built
Where the number comes from and how it can miss. Read
Taxes on option income
Short-term gains, assignment and covered-call rules. Read
Income strategy checklist
Ten questions before you start. Read
FAQ
Frequently asked questions
How can I generate income from stock without selling it?
Sell covered calls or other options against the shares, use a managed account that runs an income strategy on them, or contribute them in kind to a §721 vehicle such as Embark's SPV that targets income. All three keep your ownership and avoid a taxable sale at the start.
What is an equity income fund?
A fund that aims to pay a high, steady distribution from stocks, usually by combining dividend-paying stocks with option writing. Examples include JEPI and JEPQ (equity premium income) and QYLD (Nasdaq-100 covered calls).
Is a 10% yield on a stock position realistic?
As a target from option premium on a volatile stock, it can be, but it isn't guaranteed. It typically comes with capped upside in strong rallies and income that varies from year to year.
What is Income+?
Income+ is a managed account at Charles Schwab, in your name, where Proflex Finance (the RIA behind Embark) runs proprietary income strategies on your existing stock, targeting 10%+ a year with no lock-up and no tax deferral.
What is an income plus fund?
Income+ is Embark's managed-account version of its income strategy. Your shares stay in your own Schwab account, an options overlay targets 10%+ annual income, and there is no lock-up, but also no tax deferral on contribution.
Can I generate income from RSU shares?
Yes, once the shares are vested and you are allowed to trade them. Check your company's insider trading policy first, since some employers restrict options trading in company stock.
Is option income safer than a dividend?
Neither is guaranteed. Dividends can be cut, and option income depends on volatility and market moves. Option income also caps upside, while a dividend does not.
Sources
Data sources
Sources
Cite this article
Embark Funds Research. “Generating Income on Concentrated Stock Positions.” Embark Funds, updated October 15, 2026. https://www.embarkfunds.com/insights/generating-income-concentrated-stock
Not tax or legal advice: This article is educational. Exchange funds, partnerships and gifts carry rules that depend on your facts. Work with a CPA and an attorney before acting. Embark income figures are targets, not guarantees.
Keep reading
What Is an Equity Income Fund? Types, Yields and Risks
Dividend funds, covered-call funds and income overlays all promise income from stocks. They pay it in very different ways, at very different yields and tax rates.
Covered Calls vs. Dividend Stocks Which Pays You More?
If your wealth sits in a low-yield tech stock, you can sell it to buy dividend payers or sell calls against it. One costs tax up front; the other costs upside in rallies.
Covered Call ETF Taxes How JEPI and QYLD Really Pay Out
Two funds with similar headline yields can leave you with very different after-tax income. The difference is the tax character of each dollar they distribute.
The Embark Strategy Income Without Selling Your Stock
Contribute appreciated stock into an SPV under §721, generate 10%+ targeted annual income, keep your position, and participate in the upside. Zero tax at contribution. No margin calls. No irrevocable transfers.
Turn the position into a paycheck
See What Your Stock Could Target in Annual Income
Pick your ticker. We'll show what a 10%+ income target looks like on your position, with Embark (tax-deferred SPV) or Income+ (no lock-up managed account).