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by haltingproblem 2234 days ago
Sorry but this is terrible advice. If trading Oil Futures is akin to playing Russian Roulette then trading Oil ETFs is akin to juggling live hand grenades. One will go off as soon as you stop!

Most commodity and leveraged ETFs are designed to benefit just one party - the designer of the ETF. There are plenty of articles on USO and its travails.
2 comments
andy_wrote 2234 days ago
I'm not recommending USO or oil itself as an investment, and I agree that you will be paying money to the ETF manager if you get involved in it.

But I don't agree that USO is _more_ dangerous for a casual trader to trade than oil futures, for the reasons I mentioned.

Removing the overall fluctuations of the oil market, the relative problem with ETFs is that they bleed away value over time. That's a real issue, but I wouldn't compare that to juggling a live hand grenade.

Edit: you did not say it was more dangerous, my mistake. I do think that ETFs are less dangerous, for the reasons I mentioned.

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tramtrist 2234 days ago
I owned USO and sold it on 4/21. I lost money of course. It seems USO could never go negative according to what you said and I could only go to 0 but I learned my lesson to stay out of futures for good
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jldugger 2234 days ago
If I just wanted a ticker symbol for the price of oil to put on a 'market health' dashboard, with no intention of actually investing in the ETF at all, would USO suffice?
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haltingproblem 2234 days ago
No. USO is not symptomatic of the health of the Oil market [1]. USO is a bizarre beast and any analogy fails to explain it. The only thing indicative of the health of the Oil market is spot and futures prices. [2]

This, unfortunately (or for some, fortunately) requires understanding the structure of the Oil market and how Oil is bought, sold, delivered and transported and yes stored! Spot prices, futures, oil grades, hubs, contango, etc.

[1] https://www.bloomberg.com/news/articles/2020-04-30/investors... [2] https://oilprice.com/oil-price-charts

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somebodythere 2234 days ago
You probably want the front month WTI and possibly Brent futures price.

USO has unpredictable drift due to contract rolling and often trades at a significant premium/discount to NAV.

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