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2010•Unpublished venueRequires access

Research on Buyer Hedging Strategies and the Risk Control——The Case of Fair-Value Loss in China Eastern Airlines' Kerosene Hedging

Jiong Zheng

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Abstract

Hedging is an effective measure to evade price fluctuation risks so as to create stable cash flow and earnings.This paper take the case of China Eastern Airlines' kerosene hedging in 2008 to analyze its hedging strategy,and compared with international airliners' hedging performances at the same period and ideal hedging strategies using futures,options and their combinations.Suggestions are provided for supervision departments and firms to make better use of hedging instruments.

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What this paper is about

Hedging is an effective measure to evade price fluctuation risks so as to create stable cash flow and earnings.This paper take the case of China Eastern Airlines' kerosene hedging in 2008 to analyze its hedging strategy,and compared with international airliners' hedging performances at the same period and ideal hedging strategies using futures,options and their combinations.Suggestions are provided for supervision departments and firms to make better use of hedging instruments.

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Available abstract

Hedging is an effective measure to evade price fluctuation risks so as to create stable cash flow and earnings.This paper take the case of China Eastern Airlines' kerosene hedging in 2008 to analyze its hedging strategy,and compared with international airliners' hedging performances at the same period and ideal hedging strategies using futures,options and their combinations.Suggestions are provided for supervision departments and firms to make better use of hedging instruments.

Key concepts: Futures contract, Cash flow, Kerosene, China, Discounted cash flow, Business, Earnings, Value (mathematics)

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Research on Buyer Hedging Strategies and the Risk Control——The Case of Fair-Value Loss in China Eastern Airlines' Kerosene Hedging — Research Paper | ScholarLens