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Collar |
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CollarAn upper and lower limit on the interest rate on a floating-rate note (FRN) or an adjustable-rate mortgage (ARM).CollarA protective options strategy in which a written call and a long put are taken against a previously owned long stock position. The options may have the same strike price or different strike prices and the expiration months may or may not be the same. Also called a fence.Similar MatchesCap and collar rateCap and collar rateA mortgage which guarantees the interest rate charged will remain sandwiched between two specified levels. Cap & collar mortgageCap & collar mortgageThis is a mortgage that has both a top and bottom limit set for the interest rate. It is a very safe and risk free type of mortgage, as you are protected against intetrest rate rises above a certain point, but you are losing some of the potential gains if interest rates drop. |
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