Collar for options

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July 3, 2018 at 3:31 pm #460837
duybachhpvn
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Hi John,

The collar was only discussed in the textbook for Interest rate options. I wonder if Foreign currency options can also use Collar strategy to reduce premium cost? I think it would be perfectly fine but just want to confirm

Thanks
July 4, 2018 at 8:35 am #460916
John Moffat
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In principle it could be done, but in the exam collars always relate to interest rate options.
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