Visit our COVID-19 site for latest information regarding how we can support you. For up to date information about the pandemic visit www.sacoronavirus.co.za.

bs-regular
bs-extra-light
bs-light
bs-light
bs-cond-light-webfont
bs-medium
bs-bold
bs-black

Community


Share knowledge. Ask questions. Find answers.

Online Share Trading

Engage and learn about markets and trading online

Simon - What is the meaning of zero cost collar trade by director?

Reply
Day_Trader
Regular Contributor
Simon - I see on SENS that one Director took out zero cost collar options with a put at 22-30 and a strike at 27-65. Layman's term meaning of this?
0 Kudos
6 REPLIES 6
SimonPB
Valued Contributor
it limits potential loss or profit. In this example the director will make no money above 2765c and no losses below 2230c (during the life of the option).
0 Kudos
Day_Trader
Regular Contributor
Ok -so no growth left in GND then. Seeing that the option expires in 2010.
0 Kudos
DST
Super Contributor
Strange conclusion to draw DT - the director has a portfolio position to protect, but he is not the sole arbiter of GND's prospects, valuation or price? Or is he?
0 Kudos
Day_Trader
Regular Contributor
DST- agrree with the protection, but R27 as an upside? And also - R22 is above current trading price. So either he expects GND to fall below R22 and he won't lose a cent, or he will be in the money up to R27 and then no more profit. Can't see any great share price rises here...
0 Kudos
wesdacar
Not applicable
Are you talking GND or GDN there is a huge difference here... Typo ?
0 Kudos
Day_Trader
Regular Contributor
0 Kudos