Negative cost collar: Difference between revisions
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imported>Doug Williamson m (Expand to say "collar" provider's "expected" profit, and categorise the page.) |
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''Risk management''. | ''Risk management''. | ||
A type of options hedging structure in which the net premium payable by the hedger is negative. | A type of options hedging structure in which the net premium payable by the hedger is negative. | ||
In other words, the net premium is an amount receivable by the hedger. The provider's profit - and the true cost to the hedger - is embedded within the related strike prices of the options from which the collar is constructed. | In other words, the net premium is an amount receivable by the hedger. | ||
The collar provider's expected profit - and the true cost to the hedger - is embedded within the related strike prices of the options from which the collar is constructed. | |||
== See also == | == See also == | ||
* [[Collar hedge]] | * [[Collar hedge]] | ||
* [[Hedging]] | * [[Hedging]] | ||
[[Category:Manage_risks]] | |||
[[Category:Manage_risks]] | |||
[[Category:Manage_risks]] | |||
[[Category:Risk_frameworks]] | |||
Latest revision as of 15:03, 30 June 2014
Risk management.
A type of options hedging structure in which the net premium payable by the hedger is negative.
In other words, the net premium is an amount receivable by the hedger.
The collar provider's expected profit - and the true cost to the hedger - is embedded within the related strike prices of the options from which the collar is constructed.
