When to Use Collars or Options only

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May 30, 2024 at 6:38 pm #706264
ashleybendicion
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Good day Sir,

In some exam questions, collars are in the model answer and options in others. How exactly do we know when to use collars or options only?

For example in the March mock, the answer shows a collar but the question did not mention a collar.
May 31, 2024 at 7:17 am #706289
John Moffat
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It depends on what the question asks for.

This question specifically states: “Therefore, she wants to explore the possibility of a futures hedge and a collar hedge, but not a traditional options hedge”
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