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Your boss just told you that you (s)he heard about the possibility of reducing the costs of hedging with options by establishing a 'collar'. Explain
Your boss just told you that you (s)he heard about the possibility of reducing the costs of hedging with options by establishing a 'collar'. Explain how you can establish a collar given the option contracts. Be specific about the actions you will take upon hedge initiation (which contract? How many, what type of trade (sale vs. purchase), etc.)
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