Collar hedge and Transparent: Difference between pages

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''Risk management''.
Transparent means having the desirable quality of making full disclosure of information to markets and other stakeholders, in such a way that they can readily see and understand what has been done.


A form of hedge using options.
Transparent is the opposite of ''opaque.''


Collar hedges are more complex structures, compared with a simpler cap option or floor option. 


An advantage of collars is that they can reduce the net premium paid for the hedge.  They do this by adding a short option position to the simple cap or floor. In other words by the corporate hedger ''selling'' an option (in addition to ''buying'' the simple cap or floor option).
== See also ==
 
* [[Corporate governance]]
The premium received by the corporate reduces their net premium payable.  The net premium payable is often zero. (This arrangement is called a ''zero cost'' collar.)
* [[Disclosure]]
 
* [[Disclosure and Transparency Rules]]
It is also possible - though less common - to construct a ''negative cost'' collar, the net premium being ''receivable'' by the corporate.
* [[Efficient market]]
* [[Ethics]]
* [[FAST]]
* [[Financial reporting]]
* [[FRANDT]]
* [[Invisible FX]]
* [[Opaque]]
* [[Price transparency]]
* [[Regulation]]
* [[Stakeholder]]
* [[STS]]
* [[Tax transparency initiative]]
* [[Transparency]]
* [[Visibility]]


The case where the corporate hedger ''pays'' a net premium for the collar is known as a ''positive cost'' collar.
[[Category:Accounting,_tax_and_regulation]]
 
[[Category:The_business_context]]
In all cases, the net result and intention is to ‘collar’ the all-in hedged rate achieved within a range which is acceptable to the hedging corporate.
[[Category:Compliance_and_audit]]
 
[[Category:Ethics]]
Collars are also known as ''cylinders'', ''corridors'' or ''range forwards''.
[[Category:Financial_products_and_markets]]
 
== See also ==
* [[Cap]]
* [[Floor]]
* [[Negative cost collar]]
* [[Positive cost collar]]
* [[Zero cost]]

Revision as of 08:20, 31 August 2022

Transparent means having the desirable quality of making full disclosure of information to markets and other stakeholders, in such a way that they can readily see and understand what has been done.

Transparent is the opposite of opaque.


See also

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