Oil prices are pressuring airline stocks. These options trades can take advantage, Barclays says

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The options market has not yet priced in the damage that higher fuel costs are doing to airlines, according to Barclays.

The spike in oil prices is weighing on airline stocks, and there is still time to for traders to take advantage of that relationship through options trades, according to Barclays. Futures for U.S. benchmark West Texas Intermediate crude hit the highest level of the year on Tuesday, and jet fuel costs have also climbed. Barclays strategist Stefano Pascale said in a note to clients on Tuesday that the price of fuel is one reason for the struggle of the the U.S.

mountain Airline stocks have underperformed, as shown by the JETS ETF. Further, there is a chance that the bad news of the higher fuel costs has not fully been baked in. Several airlines, including Delta Air Lines , are scheduled to present at a Morgan Stanley conference later this week and could potentially give updated guidance that shows fuel costs are chipping away at earnings.

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