Jet fuel diff futures
A jet fuel swap is an agreement whereby a floating (or market) price is exchanged for a fixed price, over a specified period(s) of time. In addition to jet fuel, swaps are also used to hedge numerous other commodity risks incluing bunker fuel, crude oil, diesel fuel, electricity, natural gas, etc. Spot fuel markets are where gasoline, diesel, jet fuel and other commodities get a physical price tag. In Pricing 101 Part 1: Your Basic Guide to Pricing Gasoline and Diesel we learned about the first step in the fuel price influence chain: the New York Mercantile Exchange. Let’s review a little.