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collars, options on futures

This topic has 3 replies, 2 voices, and was last updated 8 months ago by John Moffat.

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February 8, 2024 at 3:18 pm #699963
zaynnnn
Participant
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is there any shortcut to memorize how to exercise the price? in some questions we exercise when the exercise price is greater than the expected future price in some cases the opposite? i am having difficulty in understanding when to exercise the price
February 9, 2024 at 7:39 am #699985
John Moffat
Keymaster
- Topics: 57
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If they are borrowing money then they will buy put options and will exercise them if the exercise price is higher than the futures price.
If they are depositing money then they will buy call options and will exercise them if the exercise price is lower than the futures price.
Have you watched my free lectures on interest rate options?
March 3, 2024 at 5:23 pm #701866
zaynnnn
Participant
- Topics: 29
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what about collars? please help thank you
March 4, 2024 at 7:51 am #701893
John Moffat
Keymaster
- Topics: 57
- Replies: 54478
If they are borrowing money then they will buy put options and sell call options in order to create a collar.
If the are depositing money then they will buy call options and sell put options.
Again, have you watched my free lectures on this?
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