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

Why can't I see the rate for my contract?

Discover how you can access information from your foreign exchange trader if your contract rate is not displayed. Learn more from our Business Help centre.

Who do I contact about fees and rates?

Don't know who to contact about fees and rates for the foreign exchange platform? Get your information here on navigating the platform.

Do I still have access to a trader for my operations?

Learn about how you can access your foreign exchange trader for your transactions in our online banking for business.

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