In a regulatory filing late Friday night, CVAN Holdings disclosed that on June 14 it entered into a prepaid variable forward
sale contract with an unaffiliated third party, the effectiveness of which was conditioned upon the satisfaction of certain conditions precedent.
Zero-Cost Collars (Collars) and Prepaid Variable Forward Contracts (Forwards)
Yeung, 2007, "An Analysis of Insiders' Use of Prepaid Variable Forward Transactions," Journal of Accounting Research 45, 1055-1079.
Contract Life, Cash Value, and Spreads for Collar and Prepaid Variable Forward Contracts The table provides summary statistics regarding contractual terms for collar and prepaid variable forward contracts.
The most common derivative instruments used by insiders are: 1) prepaid variable forwards (forwards), 2) zero-cost collars (collars), 3) exchange funds, and 4) equity swaps.