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In this question to use collar hedge against the risk, net premium of the collar is : Buy put options at 95·50 for 0·304 and sell call at 96·00 for 0·223
Net premium payable = 0·081
However in the case, the call option will not be exercised. Daikon will not receive the premium of call option to my understanding. Therefore net premium payable should be 0.304. Is my understanding correct?
Sir, I just got it. :))
No need to look into the question for me.
Thanks~ Have a good day~
Great – I am please you have got it 🙂
You have a good day also!