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Today, we’re opening a new bearish trade on JetBlue Airways (JBLU). The bounce in oil prices may be short-lived, but $40+ per barrel remains a relatively likely floor on energy in the short term. Assuming support is going to last through the proposed “informal” meeting of OPEC in September, the airlines may have some problems. As oil fell into a bear market in July, many airlines lifted their hedges, which will be a negative as prices stabilize or rise. This issue is added to a general race to the bottom as the sector deals with slowing travel in (and from) Europe and Asia.

Overall, we have a negative short-term outlook in the airlines, and recent uncertainty should act as a bearish catalyst on JBLU over the next several weeks.

Buy to open the JBLU September 16 Puts (JBLU160916P00016000).

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