07-03-2008, 07:37 AM
I hope I'm not breaking any rules here, but I'd like to know what you guys think of this website. It's www.mygallons.com and allows you to purchase gas online at today's price and fill up at any gas station. You can purchase cards for up to a year at a time, and as the price of gas goes up (or down), you will be locked in at today's rate. It costs like $30 to sign up, but if gas continues to rise, it would still save us lots of money. What do you think?
07-03-2008, 07:47 AM
It's called hedging. Southwest Airlines does it, and they have bet the right way for many years. What they (Southwest) are actually doing is purchasing fuel at todays prices, but have taken futures positions purchased in the past, which are now worth a great deal more than what they paid for them. Like buying a stock and watching it go up in value. The profit from the futures positions offsets their fuel cost. The end result is their fuel bill is much less than if they were not doing this hedge. Now hedging (which is what this plan is you have in your thread) can also work the other way, which is the "wrong way". If you bet wrong, and fuel prices go down, you are stuck paying higher than what you would pay at the actual price. So, will gas continue to go up, or with this bubble burst and it go back down? Hmmmm, let me check my crystal ball. Hah hah. :slap: