Negative cost collar: Difference between revisions

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imported>Doug Williamson
m (Spacing 21/8/13)
imported>Doug Williamson
m (Expand to say "collar" provider's "expected" profit, and categorise the page.)
 
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In other words, the net premium is an amount receivable by the hedger.   
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.
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.




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* [[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.


See also