Collar

(redirected from collarless)
Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia, Wikipedia.

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elusive deal was sealed after Quaker spurned an earlier PepsiCo offer and a more recent offer from Coca-Cola had been withdrawn.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 ?
Collarless |lemon coat PS40, culottes PS16, pointed courts PS15, all Matalan | Navy duster coat PS65, stripe top PS24, tapered trousers PS20, bag PS20, courts PS28, all Next |Jacket, PS50, T-shirt PS14, capri trousers PS38, sandals PS28, all Next | Emilia coat PS135, Lamorna shirt PS69, Erica trouser PS69, Gail bracelet PS15, Ebony suede tote PS120, all Phase Eight, phase-eight.
Her black collarless coat, by British label Goat, is a classic and flattering choice, neatly disguising her baby bump.
uk | Right: Shearling jacket PS649, tasselled dress PS250 and Lucie logo clutch PS89 | Right: Shearling jacket PS649, tasselled dress PS250 and Lucie logo clutch PS89 | Flamingo jumper PS69, ponte skirt PS49, Orelia crossbody handbag PS125 | Flamingo jumper PS69, ponte skirt PS49, Orelia crossbody handbag PS125 | Blue fur gilet PS99, Biba initial sweater PS59, rose gold print jeans PS79 and Ferrara foldover clutch PS109 | Blue fur gilet PS99, Biba initial sweater PS59, rose gold print jeans PS79 and Ferrara foldover clutch PS109 | Speckle collarless coat PS199, bug print blouse PS69, PU ponti jeggings PS59 and dome grab handbag PS179 | Speckle collarless coat PS199, bug print blouse PS69, PU ponti jeggings PS59 and dome grab handbag PS179
Take the 60s trend literally and team with a collarless coat and knee-high boots, or toughen up this feminine dress with brogues and blazer.
The collarless shirt, on-trend deck shoes and tortoiseshell shades keep him clear of falling into waiter uniform territory.
For spring, look to catwalk trends such as pastels, florals, collarless coats and bold prints.
Collarless blouses Collars were the accessory of choice for 2012 but not for 2013.
50, H by Henry Holland @ Debenhams Leopard trim gloves, PS5, Bonmarche Navy snood, PS12, Accessorize Leopard coat, PS65, Next Collarless jacket, PS59, La Redoute Sarah Harding WHERE TO BUY: UK.
1: Marks and Spencer's collarless version of the classic is pounds 69.
An iconic collarless grey Beatles jacket worn by Lennon and later given to Madame Tussaud failed to reach its asking price of $30,000, though a "Dougie Millings" suit jacket sold for $42,000 (pounds 25,407) and an outfit seen in the famous Hard Day's Night film went for $15,000 (pounds 9,074).