Zero Cost Collar

Zero Cost Collar

An investment strategy in which one buys or sells one position while taking an opposite position for the same price that will limit both the return and the risk of one's investment. An investor sells a position that caps return while buying one that limits loss, while a borrower does the opposite. A zero-cost collar may be used for options, stocks, interest rates, or commodities. See also: Collar.
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An example of a commonly used hedging/monetization strategy involves a taxpayer borrowing against the value of shares currently owned, and entering into a zero cost collar with respect to such shares.
On September 19, 2008 we terminated a zero cost collar for oil volumes of 1,000 barrels per day for the full year 2011.
The reference price for the zero cost collar is NYMEX West Texas Intermediate crude oil.
NASDAQ:CLDN) announced today that Stephen Russell, the Company's Chairman and Chief Executive Officer, has entered into a zero cost collar transaction involving about 22% of his shares.
The zero cost collar structure is similar to the oil price hedging concluded for the 2007 financial year, when a floor price of USD63,00 per barrel was achieved and upside was limited to USD83,60 per barrel, also on 45 000 barrels of oil per day.
The zero cost collar structure is similar to the oil price hedging concluded for the 2006 financial year when a floor price of US$45 per barrel was achieved and upside was limited to US$83 per barrel, also on 45 000 barrels of oil per day.
In the first agreement, the Company entered into a zero cost collar related to 5,000 MMcf of gas per day with a floor price of $4.
Goehring, senior vice president and chief financial officer, added: "In late May the company entered into a one-year zero cost collar hedge contract on 3,000 barrels of oil per day (BOPD).
Contract Amount (bbls Contract Period Contract Price Price per Type Ceiling Floor month) (US$/bbl) (US$/bbl) 187,500 January 2003 to December 2003 Zero cost collar 29.
The zero cost collar model allows users to compute the call strike for which the call premium offsets the put premium.
Contract Amount (bbls Contract Period Contract Price Price per Type Ceiling Floor month) ($/bbl) ($/bbl) 187,500 January 2003 to December 2003 Zero cost collar 29.
Contract Contract Period Contract Price Price Amount Type Ceiling Floor (bbls per ($/bbl) ($/bbl) month) 187,500 January 2003 to Zero cost collar 29.