A Collar is more flexible than futures and forwards allowing limited gains if there is a favourable price movement and it is cheaper than an option as potential gains are limited.

Question

Quizplus · Accepted Answer

A collar strategy involves holding an underlying asset while buying a protective put option and selling a call option, which limits both potential gains and losses, making it more flexible and often cheaper than buying options outright.

A Collar Is More Flexible Than Futures and Forwards Allowing