PPRuNe Forums - View Single Post - Ryanair - 6
Thread: Ryanair - 6
View Single Post
Old 2nd Sep 2008, 18:40
  #2510 (permalink)  
LGS6753
 
Join Date: Jul 2003
Location: Under the flight path
Posts: 2,632
Received 14 Likes on 5 Posts
Hedging

My understanding is that 'hedging' gives the buyer the right, but not the obligation, to purchase at a given price. Typically it costs 10% of the hedged price up front.
So if FR have hedged at $129/bbl, as long as oil remains below $116.10, they are better off buying it as required.
LGS6753 is offline