collar

collar definition - business

collar

  1. In options, buying a put and selling short a call so as to limit the potential profit and loss from an investment position.
  2. The level at which an index triggers a circuit breaker to temporarily stop trading.
  3. In an acquisition, an upper and lower limit that will be paid for shares of the company to be acquired.
  4. In a new issue, a limit on the price or interest rate that is acceptable. See also zero-cost collar.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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