Common use of Collar Clause in Contracts

Collar. Contract where the buyer is guaranteed a maximum price and the seller a minimum price. These transactions are supported by purchase and sale of options positions. A Costless Collar is where buying and selling respectively the related Call and Put are used to finance the Collar. Downside Protection: Contract designed to allow the customer to benefit from declining market prices. ▇▇▇▇▇▇▇ generally completes an option transaction(s) to limit the risk associated with this offering. E-commerce Contract offered by Oil Marketing whereby the customer purchases oil either on a prompt or forward basis via an electronic platform. EFP * A transaction in which two parties agree to exchange a specified amount of futures contracts for the same physical quantity of commodities, with the price of the commodities determined by reference to the market price of the futures.