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loss on call option - collar hedge

Jjudezz9111y ago
how to calculate the loss on collar hedge if the call option is excercised? Q 72) c) FNDC PLC - Kaplan revision kit
John MoffatJohn MoffatTutor11y ago#1
I do not have the Kaplan kit - sorry! (Do Kaplan not give an answer?)
Jjudezz9111y ago#2
they have, but i am not able to understand them. sir can you provide a general way as to how to compute the loss?
John MoffatJohn MoffatTutor11y ago#3
It is calculate in the same way as we calculate profits on put options - you take the difference between the exercise price and the futures price on the date the loan starts, multiply by the contract amount, and divide by 400.
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