Collar

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Related to Cervical collar: Cervical Spondylosis, cervical traction

Collar

Refers to the ceiling and floor of the price fluctuation of an underlying asset. A collar is usually set up with options, swaps, or by other agreements. In corporate finance, the collar strategy of buying puts and selling calls is often used to mitigate the risk of a concentrated position in (sometimes) restricted stock. When the restricted owner can't sell the stock, but needs to diversify the risk, a collar transaction is one of the few tools available. Many corporate executives who receive chunks of their compensation in restricted stock need to employ this strategy to mitigate the diversification risk in their overall portfolio.

Collar

1. A way to hedge against the potential of loss by buying an out-of-the-money put while writing an out-of-the-money call. A collar is most beneficial when an investor holds a stock that has recently experienced significant gains. If the stock falls, the investor can exercise the put, ensuring a profit. If it continues to rise, the call places a cap on the profit.

2. On an exchange, a measure designed to prevent panic selling by stopping trading after a security or an index has fallen by a certain amount. For example, if the Dow Jones Industrial Average falls 10% in a trading day, the New York Stock Exchange suspends trade for at least one hour. A collar is intended to allow investors to determine whether a situation is really as bad as it looks. It is sometimes called a circuit breaker. See also: Suspended trading.

collar

1. In options, buying a put and selling short a call so as to limit the potential profit and loss from an investment position.
2. The level at which an index triggers a circuit breaker to temporarily stop trading.
3. In an acquisition, an upper and lower limit that will be paid for shares of the company to be acquired.
4. In a new issue, a limit on the price or interest rate that is acceptable. See also zero-cost collar.
Case Study In December 2000 PepsiCo, Inc., announced it would acquire Quaker Oats Co. for $13.4 billion in PepsiCo stock. The elusive deal was sealed after Quaker spurned an earlier PepsiCo offer and a more recent offer from Coca-Cola had been withdrawn. Both soft drink giants were after Quaker's noncarbonated beverages, including Gatorade. The deal specified that PepsiCo would offer 2.3 shares of its stock for each share of Quaker. At a then-current PepsiCo stock price of $42.38, the Quaker shares were each valued at $97.46. The agreement also provided a minimum and maximum value, or collar, for the Quaker stock. PepsiCo guaranteed a minimum price of $92 per Quaker share in the event PepsiCo stock fell below $40 for ten random days during the month prior to closing. Likewise, PepsiCo would be required to pay no more than $105 per Quaker share in the event PepsiCo stock increased to more than $45.65. The collar of $92 to $105 provided a maximum and minimum value that Quaker stockholders would receive for each of their shares. The earlier PepsiCo offer specified the same 2.3-to-1 exchange rate but had been rejected by Quaker because PepsiCo was unwilling to include a collar as part of the offer. In other words, PepsiCo refused to guarantee a minimum price for the Quaker stock it wanted to acquire.
References in periodicals archive ?
Patients with clinical signs of cord compression and those who had previously been treated with either PT or a cervical collar for this episode were excluded.
If necessary, keep your dog from licking and irritating the area by applying a bitter tasting topical product or fitting the dog with an Elizabethan or cervical collar.
In this case, use of a soft, cervical collar was not appropriate.
The cervical collar keeps his head from turning left or right.
Cullison released Prager from the emergency department without a cervical collar and without performing a physical exam or taking x-rays of Prager's neck, despite the fact Prager complained of neck pain and had been in the rollover accident.
Tenders are invited for Engage dealers for sales & marketing of its products like Artificial Limbs & Assistive Devices, Wheelchairs, Joystick Wheelchairs, Tricycles, Motorized Tricycle and Hearing Aids & Mobility Aids like Cervical Collar, Walking Stick and Crutches across southern part of India including Lakshadweep, Andaman & Nicobar Island.
As he refused to undergo surgery, he was advised to wear a cervical collar to improve his neck posture and social interactions.
All the pts were immobilized in a hard cervical collar post-operatively and we routinely perform neurological examination in the immediate post-op period to check for any neurological deterioration.
One man, who was not named, was taken to hospital by ambulance with an apparent head injury and a wearing a cervical collar.
Honet & Puri (16) Group 1: Cervical collar for 4 days, then over- the-door continuous traction at home with standard medication Group 2: received out- patient care, intermittent cervical traction Group 3: hospitalization, horizontal cervical bed traction, standard medication and surgical consultation after 10-21 days Rosomoff et al (17) Aggressive physical medicine, behavioral medicine, vocational and recreational rehabilitation Perrson et al (18) Group 1: surgical Group 2: 3 months with a hard collar Group 3: 3 months of physiotherapy Sampath et al (19) No clear plan was outlined.