I bought a sizable position in USO on this am gap down. I
think in the months to come oil will be higher and not lower.
My personal feeling is we are getting a buy of a
lifetime with oil prices this low. I am looking at a final
wash around $10-12. If that happens I will continue to add to
my position.
I agree from a contrarian perspective. Though it's about timing
and being willing to go through the emotion of that. You also don't
have to pick bottoms and you can scale vs trying to buy all at
once
Also DBO appears to be a lot more stable. Looking it up looks
like USO is front month crude which makes sense for it being
weaker, whereas DBO is different, tracks changes in the DQIQ
optimum yield crude oil excess return index
here's an article that discusses the crude ETF's, DBO preformed
worse in the past but performed better this time because it didn't
have the up front crude exposure. The article concludes USL should
outperform but if the deep cantango persists or gets worse than DBO
would do better, and cautions against USO
The number of USO holders
Posted by steve on 27th of Apr 2020 at 03:01 pm
The number of USO holders on Robinhood has more than tripled over the last week while its fallen nearly 50%
I bought a sizable position
Posted by ssaffer on 27th of Apr 2020 at 03:07 pm
I bought a sizable position in USO on this am gap down. I think in the months to come oil will be higher and not lower. My personal feeling is we are getting a buy of a lifetime with oil prices this low. I am looking at a final wash around $10-12. If that happens I will continue to add to my position.
I agree from a contrarian
Posted by matt on 27th of Apr 2020 at 03:20 pm
I agree from a contrarian perspective. Though it's about timing and being willing to go through the emotion of that. You also don't have to pick bottoms and you can scale vs trying to buy all at once
Also DBO appears to be a lot more stable. Looking it up looks like USO is front month crude which makes sense for it being weaker, whereas DBO is different, tracks changes in the DQIQ optimum yield crude oil excess return index
here's an article that discusses the crude ETF's, DBO preformed worse in the past but performed better this time because it didn't have the up front crude exposure. The article concludes USL should outperform but if the deep cantango persists or gets worse than DBO would do better, and cautions against USO
https://seekingalpha.com/article/4339760-oil-price-recovery-usl-dbo-uso-which-etf-is-best
Matt - great article. I
Posted by ssaffer on 27th of Apr 2020 at 03:26 pm
Matt - great article. I will look to move some of my USO position over to DBO.