What is the difference?
Synthetic short forward is grouped under equity monetization. Long a low put and short a high call.
Collar is grouped under hedging. Long a low put and short a high call.
When do we use which?
The difference is that the collar has different strike prices, with the long put below the current price and the short call above the current price; one may create a cashless collar with this position.
The forward conversion with options involves a long put and short call with the same strike price and expiration date. So if the price falls at all, exercise the put and if it rises, deliver the shares to the long call. This strategy allows for a higher LTV loan to be obtained than the collar because the strike price is effectively locked in.
The only difference I’m aware of, is one involves taking out a loan against the collar (forward conversion with options) and the other is simply a hedge (without taking the loan out). I don’t know why they decided to call it a forward conversion instead of just saying “set up a collar, and borrow against it” but maybe someone else can point something out I’m missing.
^this is how I understand as well
A forward conversion is when you’re trying to generate liquidity on a position without selling right now. To do this, you need to hedge your position. So you buy a call and sell a put with the same strike, usually ATM. Now that your position is perfectly hedged, you can borrow against it (loan-to-value).
A collar is when you’re simply trying to hedge a position with puts and calls. Buy an OTM put and sell an OTM call (it can be a zero cost collar or not).