Originally Posted by
gloopy
Then we won't hedge because it *might* go lower.
You just don't lock in prices, someone is on the opposite end of the trade. At $20bbl, Delta would have to buy call options, and then could lose billions when the price of oil doesn't go up enough. The best way to hedge is to not do it at all. Hedging is no different than putting $1 billion on black at a roulette table in Vegas.