Fade-out zero-cost collar for hedgers
Background: The zero-cost (ZC) collar is considered an institution for hedgers. Everyone knows its benefits and disadvantages. The product allows hedgers to benefit from a potential appreciation of their currency, buying protection for one direction with an out-of-the-money (OTM) option financed by selling an OTM option for the other direction. However, this strategy does not offer much flexibility to the hedger and could be considered static. It can be improved only when the spot is moving, by
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