You are planning to buy a flat in Hong Kong next year with down payment and other expenses estimated at around 2mm USD (about 15.7mm HKD). Currently all your assets are in mainland China. RMB has appreciated against USD by about 8% so far compared to last year, and you are worried that RMB is overvalued. Based on your analysis, you think RMB may appreciate against USD by about 10% by next year this time (from 6.40 to 5.76), which you will be satisfied (further appreciation of RMB against USD will not affect your financial being). However if your expectation is wrong, and RMB were to depreciate against USD, you are not comfortable you can afford your dream flat. One strategy is to buy a USD call/CNY put at todays exchange rate of 6.40. assuming that you can get 3% interest from your 12.8mm CNY in China (2mm USDx6.40). What strike price of the call option you can get so that the cost of the option is covered by the interest payment you receive from the CNY deposit in China? If the interest is not sufficient to cover the option premium, can you design a collar structure to minimize the cost of hedging? Under current market environment, which strategy is preferable and why?