Any "Latest & Greatest" about Delta?
Gets Weekends Off
Joined APC: Jul 2010
Position: window seat
Posts: 12,524
:-)
Joined APC: Feb 2007
Posts: 7,339
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.
Beginning April 1, FA training pay goes to 4:45. Any chance we'll get a 'me too' on that one??
Gets Weekends Off
Joined APC: Jan 2007
Position: 5-9 block, kill removing
Posts: 385
Runs with scissors
Joined APC: Dec 2009
Position: Going to hell in a bucket, but enjoying the ride .
Posts: 7,728
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.
I think over the long term a fuel hedging strategy will even out the highs and lows of fuel costs making it easier to predict costs. You won't always be on the winning or losing end of the deal, but on average you will be just as well off as someone who has not hedged and you will have a more predictable number for cost estimates.
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