buzzword: unbalanced collar contract, investor, further, forward, properly

willsucceed

Welch takes this further: “properly constructed and documented, a variable pre-paid forward does not constitute a constructive sale and is not subject to margin lending restrictions.” A variable forward contract can be viewed as an "unbalanced collar," a collar where the investor does not have the same num- ber of calls and puts.
(V2, p. 282).

Is the variable forward the same as variable pre-paid forward?

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Collar List:

variable forward contract
Variable prepaid forward
"unbalanced collar"

monetized collar(?)

income-producing collar (sale of the call exceeds the cost of the put)
cashless collar=zero-cost collar=Zero-premium collar

equity collar
interest rate collar



Edited 1 time(s). Last edit at Thursday, May 19, 2011 at 09:48AM by deriv108.