Airlines Could Hedge With Commodity Oil Options, If They're Available

I think it's $117 a barrel tonight, down from $147 (?) not that long
ago

Instead of futures contracts which take mucho skill, utilize "simpler"
commodity options

Oil is as volatile as ...oil, and will probably ascend again & again
and fall again & again

If a casino...uhh... exchange is offering call & put options on
petroleum, then these boogers...uh...instruments could seemingly save
an airline from bankruptcy

since its a type of business insurance (as earlier pointed out to the
n.g.), i suppose it's a legit bizness expense

Futures are trickier to use, while Southwest has had reputed success
with 'em, and so could other aitlines

On Aug 8, 9:21*pm, Robert Cohen wrote:
I think it's $117 a barrel tonight, down from $147 (?) not that long
ago

Instead of futures contracts which take mucho skill, utilize "simpler"
commodity options

Oil is as volatile as ...oil, and will probably ascend again & again
and fall again & again

If a casino...uhh... exchange is offering call & put options on
petroleum, then these boogers...uh...instruments could seemingly save
an airline from bankruptcy

since its a type of business insurance (as earlier pointed out to the
n.g.), i suppose it's a legit bizness expense

Futures are trickier to use, while Southwest has had reputed success
with 'em, and so could other aitlines


http://www.msnbc.msn.com/id/26125428/


I don't know if this is a bad idea or terrible idea:

The airports could also speculate in futures and/or options, and make
or lose gallons of money.

I think it's $117 a barrel tonight, down from $147 (?) not that long
ago

Instead of futures contracts which take mucho skill, utilize "simpler"
commodity options

Futures are quite straightforward if you're using them for hedging and
intend to take delivery, as airlines do. They're only tricky if
you're speculating and have no use for the 100,000 barrels of oil you
buy.

I like the idea that airports buy oil futures. It might be quite a
competitive advantage to be able to sell fuel to airlines two years
from now at today's price. Or maybe not.

R's,
John

John Levine wrote:

I think it's $117 a barrel tonight, down from $147 (?) not that long
ago

Instead of futures contracts which take mucho skill, utilize "simpler"
commodity options

Futures are quite straightforward if you're using them for hedging and
intend to take delivery, as airlines do. They're only tricky if
you're speculating and have no use for the 100,000 barrels of oil you
buy.

I like the idea that airports buy oil futures. It might be quite a
competitive advantage to be able to sell fuel to airlines two years
from now at today's price. Or maybe not.

Or maybe not is right. If they had futures at the peak price a month ago,
they would have lost their shirts with the price today.

On Aug 10, 8:59*pm, James Robinson wrote:
John Levine wrote:
I think it's $117 a barrel tonight, down from $147 (?) not that long
ago

Instead of futures contracts which take mucho skill, utilize "simpler"
commodity options

Futures are quite straightforward if you're using them for hedging and
intend to take delivery, as airlines do. *They're only tricky if
you're speculating and have no use for the 100,000 barrels of oil you
buy.

I like the idea that airports buy oil futures. *It might be quite a
competitive advantage to be able to sell fuel to airlines two years
from now at today's price. *Or maybe not.

Or maybe not is right. *If they had futures at the peak price a month ago,
they would have lost their shirts with the price today.

BAD BETS

that's why commodity options can take out some of the volatility

also, experts in futures markets and options markets do play complex,
sophisticated hedging tactics/strategies/games: "spreads" are
relatively simple compared to some of the stuff i've read they may
utilize

I like that part where the "player" himself (herself) takes delivery
(if necessary), and that in itself takes much more of the gambling and
speculation risk away

if the IRS treats it as insuance and/or bizness expense which it is,
i can't see a loss (and there can be small ones) as unacceptably risky