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Delta Air Lines, Inc. (NYSE:DAL) shares are down 1.9% to $43.26 Monday afternoon, marking a 7.6% decrease for July. The stock was volatile last week, initially falling but bouncing back following financial reports from American Airlines Group Inc (NASDAQ:AAL) and Southwest Airlines Co (NYSE:LUV).
Delta is additionally dealing with financial difficulties due to a recent system failure that caused thousands of flight cancellations and prompted a federal investigation. Citigroup has cut Delta’s third-quarter earnings estimate by 60 cents per share to $1.37. Analysts predict a $350 million hit to operating profit and potential fines.
When major airlines like American Airlines and Southwest Airlines report worse-than-expected results, it suggests broader issues in the industry. Investors might believe Delta faces similar problems, such as rising operating costs, capacity management challenges and fluctuating demand.
Southwest Airlines reported a significant 13% increase in operating expenses, driven by higher salaries, wages, benefits, and maintenance costs. These pressures are likely affecting all airlines, including Delta, raising investor concerns about Delta's cost management and profitability.
By now you're likely curious about how to participate in the market for Delta Air Lines – be it to purchase shares, or even attempt to bet against the company.
Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy ‘fractional shares,' which allows you to own portions of stock without buying an entire share. For example, some stock, like Berkshire Hathaway, or Amazon.com, can cost thousands of dollars to own just one share. However, if you only want to invest a fraction of that, brokerages will allow you to do so.
In the case of Delta Air Lines, which is trading at $43.33 as of publishing time, $100 would buy you 2.31 shares of stock.
If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to ‘go short' a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.
According to data from Benzinga Pro, DAL has a 52-week high of $53.86 and a 52-week low of $30.60.
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