Collar

Hi Jhon, My understanding about collar hedge is as follows: 1. premium payable today (difference between call and put rate) 2. exercising option similar to options on futures. when the interest rate is higher in the market exercise the option, if not allow it to lapse. 3. The only thing that separate a collar hedge from options on future is we can use either of the exercise price (put or call) depending upon the rate of interest prevailing in the market at the date of settlement. 4. The confusion for me is when single strike rates given for put and call which one to use for put and which one for call. (for eg. pilot paper june-13 onwards). Would the theory work, if I consider borrow money, therefore put option and the higher exercise price(I mean lowest interest rate) to sell and lowest exercise price (higher interest rate) to buy. Is this knowledge enough for me to construct a collar hedge accurately??? Thanks