collar

With interest rate options you exercise a call option when the futures price is higher than the exercise price. You exercise a put option when the futures price is lower than the exercise price. I explain all this in my free lectures!!

so we exercise as what you have mentioned regardless of whether we are buying or selling call option/put option ?

If we buy an option then it is us who decides whether or not to exercise. If we sell an option then it is the person who bought it who decides whether or not to exercise. Again....I explain all this in my lectures!