## Zero Cost Strategy

### Zero Cost Strategy

### What is 'Zero Cost Strategy'

A trading or business decision that does not entail any expense upon execution. Zero-cost trading strategies can be used with a variety of investment types, including equities, commodities and options. A zero-cost business strategy might be to improve sales prospects for a home by decluttering all the rooms, packing excess belongings into boxes and moving the boxes to the garage. Zero cost strategies often involve the simultaneous purchase and sale of an asset such as that both costs cancel each other out.

### Explaining 'Zero Cost Strategy'

One example of a zero-cost trading strategy is the zero-cost cylinder. In this options trading strategy, the investor works with two out-of-the money options, either buying a call and selling a put or buying a put and selling a call. The strike price is chosen so that the premiums from the purchase and sale effectively cancel each other out. Zero-cost strategies help reduce risk by eliminating upfront costs.

### Zero Cost Strategy FAQ

#### How does a zero cost collar work?

#### How do you hedge a put call?

#### Can you lose all your money in options?

### Further Reading

**Strategic price complexity in retail financial markets**

www.sciencedirect.com [PDF]

… consumers. So, equilibrium prices are strictly higher than marginal cost and there is always a non-degenerate distribution of prices (price dispersion) … fund). The firms face zero marginal costs and have no capacity constraints. The …

**Finance theory and financial strategy**

pubsonline.informs.org [PDF]

… consumers. So, equilibrium prices are strictly higher than marginal cost and there is always a non-degenerate distribution of prices (price dispersion) … fund). The firms face zero marginal costs and have no capacity constraints. The …

**Investor activism and financial market structure**

academic.oup.com [PDF]

… consumers. So, equilibrium prices are strictly higher than marginal cost and there is always a non-degenerate distribution of prices (price dispersion) … fund). The firms face zero marginal costs and have no capacity constraints. The …

**Is the 'buying winners and selling losers' trading strategy profitable in the New Economy?**

www.tandfonline.com [PDF]

… consumers. So, equilibrium prices are strictly higher than marginal cost and there is always a non-degenerate distribution of prices (price dispersion) … fund). The firms face zero marginal costs and have no capacity constraints. The …

**Tax planning, regulatory capital planning, and financial reporting strategy for commercial banks**

academic.oup.com [PDF]

… consumers. So, equilibrium prices are strictly higher than marginal cost and there is always a non-degenerate distribution of prices (price dispersion) … fund). The firms face zero marginal costs and have no capacity constraints. The …

**Financial conglomeration: efficiency, productivity and strategic drive**

www.tandfonline.com [PDF]

… consumers. So, equilibrium prices are strictly higher than marginal cost and there is always a non-degenerate distribution of prices (price dispersion) … fund). The firms face zero marginal costs and have no capacity constraints. The …

**Strategies for financial reforms: interest rate policies, stabilization, and bank supervision in developing countries**

link.springer.com [PDF]

… consumers. So, equilibrium prices are strictly higher than marginal cost and there is always a non-degenerate distribution of prices (price dispersion) … fund). The firms face zero marginal costs and have no capacity constraints. The …

**Anomalies: The law of one price in financial markets**

www.aeaweb.org [PDF]

… consumers. So, equilibrium prices are strictly higher than marginal cost and there is always a non-degenerate distribution of prices (price dispersion) … fund). The firms face zero marginal costs and have no capacity constraints. The …

**Financial valuation of guaranteed minimum withdrawal benefits**

www.sciencedirect.com [PDF]

… consumers. So, equilibrium prices are strictly higher than marginal cost and there is always a non-degenerate distribution of prices (price dispersion) … fund). The firms face zero marginal costs and have no capacity constraints. The …