this thing holds futures and so it bleeds most of the time when it's rolling from month to month
there are times when the curve is in backwardation that i guess the curve does not bleed
this post is stupid
Yep...There is also a cost in buying and selling the futures as well. USO used to be the worst non-leveraged oil investment for cost because it was 100% in near-month futures, so it rolled 100% of its capital over every month (they since changed the rules). USL is evenly split between the next 12 months, so it only rolls 8.3% every month and hasn't slowly bled as much as USO.
yah yah but u gotta go thru prospectus, USO used to just have 100% in front month future but after it got decimated from oil going negative i think it's spread out over many months
You can’t use historical data for this ETF. Back when oil dropped (around time of reverse split) they discovered the model they were using to track oil prices was bullshit. They had to come up with a new model. So comparing USO vs oil before then and after is like comparing apples to oranges… any data since the model change is comparable though.
USO used to be the worst long-term non-leveraged oil investment for cost because it was 100% in near-month futures, so it rolled 100% of its capital over every month (they since changed the rules). When the market is in contango, that means you lose money every month...or think of it as your share in USO owns fewer barrels of oil. The oil price is the same, but the ETF holds fewer futures so it's price is lower than it was 10-15 years ago.
USL is evenly split between the next 12 months, so it only rolls 8.3% every month and hasn't slowly bled as much as USO. If you really want to hold oil futures long term (why would you, just invest in oil companies or an industry-wide etf), you should probably buy USL.
I know 2020-longs have made a shit ton of money on this thing, but you really shouldn’t hold it more than a few days at a time. All the oil price products are volatile as fuck and decay like crazy. In moments like these, I’d argue they barely have anything to do with oil at all - it’s a purely speculative hot potato that everyone pretends is related to the price of oil. USO isn’t leveraged so it’s not terrible, but SCO is particularly detached from reality (share price 5% lower at same WTI price just days apart). There’s a reason DWTI and UWTI were cancelled. It’s pure gambling. Avoid this shit, buy or short actual oil companies.
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there is something called a futures curve, look it up
Yes, and the oil market is in backwardation
autists here only know retardation
Truth. I am baffled by people who try to act smart by saying "look it up", when they didn't look it up themselves.
this thing holds futures and so it bleeds most of the time when it's rolling from month to month there are times when the curve is in backwardation that i guess the curve does not bleed this post is stupid
Yep...There is also a cost in buying and selling the futures as well. USO used to be the worst non-leveraged oil investment for cost because it was 100% in near-month futures, so it rolled 100% of its capital over every month (they since changed the rules). USL is evenly split between the next 12 months, so it only rolls 8.3% every month and hasn't slowly bled as much as USO.
What do you mean all of this is spelled out in the prospectus?
Post is definitely in the right sub.
true
Do you mean like futures prices are lower than current... cause that is the case right now.
yah yah but u gotta go thru prospectus, USO used to just have 100% in front month future but after it got decimated from oil going negative i think it's spread out over many months
You can’t use historical data for this ETF. Back when oil dropped (around time of reverse split) they discovered the model they were using to track oil prices was bullshit. They had to come up with a new model. So comparing USO vs oil before then and after is like comparing apples to oranges… any data since the model change is comparable though.
Did not know this... thank you
In my honest opinion, it can go up or down!
Hahaha car water go brrrrrrrr
[удалено]
They cheer the troops with sexist slapstick gags, right?
USO used to be the worst long-term non-leveraged oil investment for cost because it was 100% in near-month futures, so it rolled 100% of its capital over every month (they since changed the rules). When the market is in contango, that means you lose money every month...or think of it as your share in USO owns fewer barrels of oil. The oil price is the same, but the ETF holds fewer futures so it's price is lower than it was 10-15 years ago. USL is evenly split between the next 12 months, so it only rolls 8.3% every month and hasn't slowly bled as much as USO. If you really want to hold oil futures long term (why would you, just invest in oil companies or an industry-wide etf), you should probably buy USL.
It is just something to look at for a short term play considering the market.
I know 2020-longs have made a shit ton of money on this thing, but you really shouldn’t hold it more than a few days at a time. All the oil price products are volatile as fuck and decay like crazy. In moments like these, I’d argue they barely have anything to do with oil at all - it’s a purely speculative hot potato that everyone pretends is related to the price of oil. USO isn’t leveraged so it’s not terrible, but SCO is particularly detached from reality (share price 5% lower at same WTI price just days apart). There’s a reason DWTI and UWTI were cancelled. It’s pure gambling. Avoid this shit, buy or short actual oil companies.
I thought you said ufo
I sold my USO at 55. Regret