Looking at the following chart, it might be appropriate to offer fuel marketers congratulations simply for surviving 2025.
The geopolitical and economic factors that whipsawed the market last year have been well documented. While it’s important to understand what happened, your customers want to know what comes next.
Turning Fear into an Opportunity
Customers fear locking in a fuel price before a major selloff. Last year’s market turmoil justifies this concern. They suffer buyer’s remorse if price collapses after they buy. If they delay and the price goes even higher, they can be hurt financially. Innovative fuel marketers can use option strategies to offer a solution to this dilemma.
For example, a call option is the right to buy a particular futures contract at a certain strike price. Call options can offer financial protection if prices rise above the strike price. However, if prices move down, the call buyer is not obligated to buy the futures at the strike price. A call option buyer’s risk is limited to the premium paid for the option. A call option is an effective way to address the problem of fuel buyer’s remorse. The customer has upside price protection but can still benefit if prices move lower.
Don’t Just Survive…Thrive!
Effective option strategies can dynamically change fuel marketers’ relationships with their customers by:
- Bonding the customer to the marketer for the term of the deal
- Helping customers win with upside protection and the chance to benefit from lower prices
- Selling not only price but peace of mind
You can set yourself apart from the competition. You can change the sales dynamic and be on the same side as your customers – both of you rooting for lower prices.
While no one can consistently predict the future, anyone can develop a consistent plan to deal with market uncertainty.
Please contact us if you want to learn how your company can implement these powerful tools.
Disclaimer
- This material has been prepared by a sales or trading employee or agent of Powerhouse Brokers LLC, and is, or is in the nature of, a solicitation. This material is not a research report prepared by Powerhouse Brokers, LLC. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.
- DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION.
- The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Powerhouse Brokers, LLC, believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.
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