Contributor: Christin Hinkle
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The Long Right Tail: Asymmetry in Single Stock Collars
As we saw with SpaceX in June, a number of larger IPOs on the horizon could drive single-stock hedging demand from allocators. While there are various ways to hedge, option markets were quick to develop and have often been the preferred hedge expression, with zero-premium collars[1] being particularly popular. Investors may be surprised by the…