Business Help centre

What is an exchange rate collar?

The collar is a combination of options guaranteeing buyers that the exchange rate at which they carry out their transactions for a given period will remain between a ceiling and a floor rate determined on the day the collar was purchased.

The collar is a compromise that allows businesses to regain some of the advantages of the foreign exchange option, but at a lower cost. It provides protection against an unfavourable rate fluctuation, but the business will only participate in part in any favourable exchange rate fluctuations.

For more information:

Visit our Foreign exchange risk hedging page
Download our guide 
Contact your account manager

Related questions

How long does it take before I have a monetary adjustment following a cancellation or modification of a foreign exchange contract? Learn how long it takes for a monetary adjustment following a cancellation or modification of a foreign exchange contract.
Why don’t I see the rate for my contract in my foreign exchange platform? Get more information from your foreign exchange trader if your contract rate is not displayed.
In what types of situations should I talk to my trader? Discover the kinds of situations where you should consult your foreign exchange trader.
How do I correct an error during a foreign exchange transaction? Find out how you can correct an error in a foreign exchange transaction.
When will my transaction be visible on the foreign exchange platform? Your transaction will be visible on the platform as soon as its confirmed.

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