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Erschienen in:
2023 | OriginalPaper | Buchkapitel
Hedging Strategy Case Analysis—Southwest Airlines
verfasst von : Boao Yu
Erschienen in: Proceedings of the 6th International Conference on Economic Management and Green Development
Verlag: Springer Nature Singapore
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Abstract
Hedging is a typical method for companies to avoid risks. A good hedging strategy could help the firm to deduce the temporary risks and losses caused by the fluctuation of their financial determinants. The main purpose of this paper is to represent the importance of hedging strategy for a company by analyzing the hedging strategy used by Southwest Airlines in 2021—a typical example of a firm that used hedging strategies a lot in the real life. In this paper, a financial analysis would be made based on the firm’s general background information, financial situation, and historical stock price. Based on that information, specifically, the hedging strategies for fuel with a long call option, short call option, and short put option would be analyzed. This paper could provide a reference for airline companies as well as the firms which have high fluctuation in their inputs.