Financial and business terms

ZERO COST COLLAR

zero cost collar: translation

The purchase of a floor (or cap) option with the proceeds realized from simultaneous sale of a cap (or floor) option. The levels of the floor and cap are selected so that the proceeds from the option sold exactly offset the cost of the option purchased resulting in a net transaction cost of zero.
Seecap, collar and floor

  1. zero cost collar—Zero Cost Collar translationA type of positivecarry collar that secures a return through the purchase of a cap and sale of a floor. Also called zero cost options or equit...Investment dictionary