I posted a number of airline trades on X this week. This is unusual flow and could be related to Iran. Airlines generally perform poorly when oil is high so someone is taking a bet here that oil is coming down. Major airlines are aggressively cutting flight schedules and trimming unprofitable routes to combat rising jet fuel prices. This supply reduction acts as a pricing floor. It allows legacy carriers to maintain pricing power, boost ticket fares, and pass fuel costs onto consumers to preserve profit margins. Crude oil and jet fuel prices have surged due to macroeconomic and geopolitical tensions with Iran. Institutional option buyers are placing massive directional bets that energy prices are peaking. If oil rolls over, airlines enjoy immediate margin expansion from these beaten-down valuations.
I followed the JETS, AAL and DAL trades this week. I am already short oil and long /ZB as a macro trade so it will be interesting to see if it works out.
Here are the trades in my Discord this week.
Only UAL has seen unusual dark pool flow - $131 million this week
