An FX collar in Fairways FX is a security combining the purchase/sale of an FX cap and the sale/purchase of an FX floor to specify a range in which an FX rate can fluctuate.
Log In to Fairways FX
- Log in to your Fairways FX account.
- Select an account.
Price a Collar
- Navigate to Pricing Tools.
- Click Select Pricing Tools > Collar Pricing.
- Complete the form with all relevant details.
Note: Fields marked with an asterisk * are mandatory.
|
Field |
Description |
|---|---|
|
Market Date |
Date on which the collar is priced. |
|
Currency Pair |
Currencies to buy (for a call) or to sell (for a put). |
|
Field |
Description |
|---|---|
|
Exercise Date |
Start date of the transaction. |
|
Value Date |
2 calendar days later than the exercise date. |
|
Field |
Description |
|---|---|
|
Type |
Direction of the option:
|
|
Notional Amount |
Nominal amount invested in the option. |
|
Currency |
Currency to buy (for a call) or to sell (for a put). |
|
Strike |
Exchange rate level at which the option can be exercised. This rate is usually compared to the spot rate to determine the moneyness of the option. |
|
Barrier Option (European Style) |
Includes/excludes a European barrier option. |
|
Barrier Option Type |
Note: This field only displays if the barrier option is included. Behavior between the spot price and the barrier level:
|
|
Barrier Rate |
Note: This field only displays if the barrier option is included. Value of the barrier. |
|
Field |
Description |
|---|---|
|
Spot Rate |
Specific rates to price the collar. |
|
Forward Points (bp) |
|
|
Volatility Bought Option |
|
|
Volatility Sold Option |
Note: Click the clock 
to use real-time rates or click the adjacent last referenced rates in the application to use them.
- Click Validate to price the collar.
The pricing results display.
Note: Click +/-5 to simulate different results.
