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loss on call option – collar hedge

This topic has 3 replies, 2 voices, and was last updated 10 years ago by John Moffat.

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November 28, 2014 at 11:44 am #214058
judezz91
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how to calculate the loss on collar hedge if the call option is excercised?
Q 72) c) FNDC PLC – Kaplan revision kit
November 28, 2014 at 12:50 pm #214096
John Moffat
Keymaster
- Topics: 57
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I do not have the Kaplan kit – sorry!
(Do Kaplan not give an answer?)
November 28, 2014 at 2:50 pm #214130
judezz91
Member
- Topics: 11
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they have, but i am not able to understand them. sir can you provide a general way as to how to compute the loss?
November 29, 2014 at 11:18 am #214288
John Moffat
Keymaster
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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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