Supply and Demand

If you have studied the sciences of business or economics, you would have come across the term and taught the theory of "Supply and Demand".

Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. Supply represents how much the market can offer.

All trading is dependent on the relationship between the Demand for the particular product and the Supply or amount of Supply available. In a situation with very high Demand and very low Supply, the pricing will increase as the sellers get to charge the premium for the product in short supply.

As the demand wanes, and the inventories are raising for the product, there is an over Supply of the product into the market which in turn creates lower pricing as those who own the product are willing to sell at lower pricing to replace the product for cash.

The Supply and Demands are moving targets with the constant increase and decrease of inventories globally. With the Demand being hard to foresee and predict, manufacturers forecast what they believe will be the market demands, but they often get caught with a higher Demand that the Supply!

The Aviation Option Market, is the best method to track and see the real time pricing of aircraft parts since Buyers and sellers are agreeing to the price that they would look to buy or sell the part at during the contract period. Based on this pricing the Buyer then pays an Option Contract premium. The Aviation Option Market therefore is an ideal platform to track the real demand and supply of the various aircraft parts needed in the aircraft flying or on the ground!

The Aviation Option market adds transparency to the aviation after market as all aircraft parts listed and contracts undertaken are tracked by serial number, location and by 3rd parties!