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best hedge for fuel w/no storage
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obie_iaffa
Posted 9/14/2021 06:39 (#9219301 - in reply to #9218230)
Subject: RE: best hedge for fuel w/no storage


NE Iowa
Heating oil call options work the best. 1 contract is 42,000 gallons. We try to keep the cost at around a dime a gallon. Usually that'll get you a call option within a dime of the futures contract price on the board fuel price. Example, if heating oil is trading at $2.10 a gal, spending a dime will get you a $2.20 call option.


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