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Online Share Trading

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What's a Collar?

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Jim_Bean
Regular Contributor
Could someone please explain what a Collar on MTN ordinary shares are? I see on SENS that the MTN chairman has a collar of these ordinary shares. I've no idea what he's doing.
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8 REPLIES 8
SimonPB
Valued Contributor
selling calls and buying puts .. in this case he makes no money above R320.05 an loses no money below R226.73 up until 2017
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Not applicable
In other words - the man has no confidence in his own company - indicative of the drop today
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Jim_Bean
Regular Contributor
Another questions, whats the timeframe of this trade? So basically he's betting that the share will not fall below R226 and raise above R320 in the x period. This is pretty much the range the share has been trading in.
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Rams
Super Contributor
So thats it: we have a head and shoulder, now a collar!
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steve_1
Frequent Contributor
Why the big drop yesterday?
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SimonPB
Valued Contributor
0 Kudos
Not applicable
I suppose the lack of confidence? So what does he stand to make if he is right? If this drops to 22000 today or Monday - this could be a nice enter on support and could pose a nice quick V bounce next week...
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steve_1
Frequent Contributor
Small recovery so far today....
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