Originally Posted by
ajhira
What I fail to understand is why they can't buy your fuel for your flight in 3 months on the day they actually sell you the ticket? Ie. if they sell 10,000 tickets today they know where they are going and how much fuel they require - why not hedge fuel the same day or the same week? That is what genuine hedging is not the BS they are currently doing.
Perhaps I should have become a financial advisor instead of a custom tailor! 😜
I am not sure I understand your question but if you meant buying physical fuel, then you have to consider the cost of storing it which is far from free.
When you buy forward contract you do not actually received the physical product you just pay/receive the spot difference with the forward price on the settlement date. (although they are stories of traders who went for physical delivery
)