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Old 25th Feb 2009, 06:44
  #96 (permalink)  
im sparticus
 
Join Date: Jan 2008
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tsalta,

short put + long call (same strike) = synthetic long swap, same same does the collar still seem odd now?

to the hindsight economists, der VB hedged late so what its in the past, what we should be questioning is there hedging plan for the future and theirs is to reduce when the price of fuel is low and probably take out hedges again WHEN fuel takes off and they get squeezed by unbearably high prices, which by the book is not a hedging plan at all as you pay through the nose when prices drop of the highs and miss out on the savings when the price takes off again.

imo the key to getting the most out of hedging is not how much you hedge (%) or by what strategy (options/swaps/futures or straight out fuel hoarding) but to be consistent with your plan throughout the cycle.

Last edited by im sparticus; 25th Feb 2009 at 07:08.
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