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Journal of Competitiveness

Hedging of Sales by Zero-cost Collar and its Financial Impact

Bartoňová Marie

Keywords:
zero-cost option strategies, put option, call option, exchange rate, strike price, hedging

Abstract:
The zero-cost option structures appeared in 90´s and became popular tool of hedging. They come of combination of standard and also exotic option. The paper deals with the most famous of them - zero-cost collar strategy. It is researched from sales hedging point of view, so the paper proposes an application of the strategy in hedging against an exchange rate drop of the currency at a future date. The goal of paper is certification of theoretical findings in particular option contracts for sales hedging and a financial impact analysis of reached results. The paper shortly devotes also to find out offer of products in zero-cost option area and their availability and expediency for Small and Medium-sized enterprises.

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Hedging of Sales by Zero-cost Collar and its Financial Impact [PDF file] [Filesize: 865.93 KB]

10.7441/joc.2012.02.08


Bartoňová, M.(2012). Hedging of Sales by Zero-cost Collar and its Financial Impact. Journal of Competitiveness, 4 (2), 111-127. https://doi.org/10.7441/joc.2012.02.08

Journal of Competitiveness

  

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ISSN 1804-171X (Print); eISSN 1804-1728 (On-line)


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