I think it was the quotation marks...

Oh "whack"? That was my point though. "Whack" implies a one time large hit. They're not losing on the roll, which is the common misconception I was talking about. They're losing on contango, i.e. futures converging to spot.

My point that was poorly worded was the loss I'm talking about is relative. Holding USO for a month can still be profitable, and rolling when the market is backwardated is profitable, just not as profitable as if they had operated differently. This convo started about the Fed buying oil futures and my point was that if the Fed does that (I don't think they can nor will), I believe all the contracts they hold would be public knowledge so they would have similar issues.



That would probably work but I would say it's more like sell it right before they start the roll and then buy it during/after the roll. They have to be moving the market when they roll (at least some months, if not all). That said, things happen that can still make that a losing trade. Iran fires missiles at some US targets while you've got that trade on and you've got some problems. I'd have to think long term that trade would have been profitable though and certainly was recently. Sounds like you probably have more access to that data than I do so maybe you can find out? But with the entire structure of the fund changed it would unfortunately be pointless.


Ha, isn't that what I said? I'd like to think that I still understand forward curves though it's been a while, that is what trading/hedging physical is all about. Unfortunately I never traded energy (those guys made a lot more money than our guys), but I do know that holding front month futures in volume near expiration without an option to make/take delivery if need be leaves you at the mercy of the market. So much the worse when the market knows exactly what you hold.


Certainly the contango has been the real problem for USO. If they rolled in a backwardation every month (even if it was less backwardated than it should have been otherwise) nobody would be complaining. But my point is I believe they were deepening the contango with how they operated.

The July contract opened @21 and is already @18

USO is trapped

https://www.reuters.com/article/us-u...-idUSKCN2291RV

"After the current roll over, USO’s portfolio will be invested about 30% in the July contract and about 15% each in the August, September, October and December contracts. Almost 10% of the portfolio will be invested in June 2021 contract."

loving the recent conversation, ty everyone, you guys rule, I'm finally back in the black today after some very questionable decisions

love these threads and hope to one day contribute more than as a cautionary tale of why you don't hold SPXU long term or buy 1 and 2 year long calls on an ETF when you don't even know what an ETF is

you guys rock, when i'm stateside next arby's on me - i'm actually serious about that regardless of the impracticality of arranging it

USO puts looking so hot right now, all expiring between May 1 and mid June, think I'll ride with it until near expiration or at least through the reverse split tomorrow and potential 4bn share issuance - as low as the etf price is today, it could still drop quite a bit to NAV levels when they start messing with it again

Retail shouldn't really be trading physically delivered contracts. I'd imagine it has more to do with brokers avoiding another hit, rather than a conspiracy of brokers trying to hoard contacts to sell to the Fed.

deeply confused, USO drops another 14 cents in after market to $2.05 but now the NAV is 2.43? How did that happen?

https://finance.yahoo.com/quote/uso/

Am I reading this wrong? Or should I immediately sell all my puts in the event stock price and NAV are corrected at reverse split at end of day?

I don't get how it go up so much dramatically while the price itself plummets and just a few days ago the etf price was rising but the NAV was plummeting. Weird stuff that doesn't make any sense.

My noob logic says sell all my puts and buy USO calls for 5/1 expiration hoping for NAV correction and then back to the puts later?

Helicopter View of Oil Tankers | California Coast April 27th 2020

googled USO to see if new stock price and NAV price had updated and found nothing but positive articles proclaiming the bottom has been hit and time to start buying USO

can't wait to load up on more put options when the markets open now that it should have quite a bit more room to easily fall

going to have to call you out here. i usually just tolerate you but this post was just too tilting.

you post incessantly, and equally terribly, across multiple forums. on the one hand, it's impressive that you're ambitious to try to take on so many incredibly complex challenges all at once, starting from a position of absolutely no knowledge on any of them. on the other hand, how can one person be so clueless on such a wide variety of topics? how did you **** up your life so badly that you know nothing about anything, and you're living in china? this alone should be a sign that you're likely not qualified for the kinds of things you're trying to do.

but whatever. i, and everyone else, tolerate your absolute idiocy. but then you come in here, saying "hey guys, please give me some more handouts. despite my IQ of around 90, i'm going to be the next great coder/bitcoin trader/option trader/sports bettor/data analyst all at once, so please spell it all out for me for free, experts." you're like a child who walks in to the middle of an avante garde film and asks for a full synopsis while the adults are trying to watch.

do you have no sense of modesty? what makes you think anyone here has the time to hold your dick while you piss out $100 trades? how do you not understand how incredibly out of your depth you are? you are one of the worst cases of dunning-kruger on this forum. that is saying a lot, considering 90% of posts are just noise.

i sincerely hope this will serve as a wakeup call, and you'll make some changes in your life. i hope one of the first changes will be posting less.

lol, i thought you looked familiar

To those holding oil tanker stocks, what do you make of the reports that storage demands are significantly down.

https://twitter.com/erikstownsend/st...431261696?s=21


Sent from my iPhone using Tapatalk

iq 90 agrees

it's these iq 89s though which are why i'll keep on pouring on the puts until we're finally out of the rona hump and/or opec does something dramatic



didn't watch fyi, just saw the title, hat and ill fitting tshirt was enough info to remain bearish lol

Thanks, that's an incredible read

USO etf price 18.08
USO nav price 17

the hood won't allow people to trade options on the new uso so going to have to buy more puts on ibkr

https://oilprice.com/Energy/Crude-Oi...ng-In-May.html

i'm too new to this to have any idea if oilprice.com is a reasonable source or just a bunch of guys like me who are blogging or shills trying to move the market along with their positions but this looks like there's still plenty of room to drop

WTI crude down $1.5 since close on Friday, as well

the hood now lets you trade options again so i'm going to start buying more puts asap and with the 8-1 reverse merger there's a lot more room for put options to have high multiple payouts

considering dumping all my USO1 May 8/15/22 puts now and just rolling them into current USO puts because it seems like there's more room for gowth now

yeah oil is ripping right now, but don't think this is going away

Front month crude is at $32.32. Before this threads dies out, I thought I'd give these know-nothing novices a May month-end update. Since I posted this on 3/15 (the exact date is not important):

XLE: 22.2%
S&P: 12.3%
Big talk, all angleshoot, no trades: 0.0%
USO: -53.5%
USO ATM/OTM calls expiring in 1yr: -90% to -99% (guess)

And this is after USO changed their structure not once, but twice. Otherwise USO numbers would look much uglier.

I responded to rick in PM:

First, regarding the underlying, I don't like CL/USO b/c of major contango. You are paying massive premium over spot just for that, which is why I said XLE is better. XLE also pays a nice dividend, assuming it doesn't get cut. And this is only if you have to trade oil. Frankly, crude and S&P will share some correlation here, so you might as well auto-diversify yourself into SPY. You shouldn't be worried about outperforming this or that, just make some money first.

Next, if you check OVX (oil vol index), oil volatility is highly elevated. Higher than 2008 in fact. So you're paying two massive premiums upfront. Nor am I fan of buying options in general. Real traders, the ones that actually trade markets and not just talk about them, have humility, and know they cannot predict every turn of the market. With options, you have to be right about both the direction and timing of the market, all while dodging vol crush. So when Tooth says "options are just leverage", it's some pretty dangerous nonsense he's spreading.

As for specifics, you were paying 32% premium on that option. Now sure, if oil rallies very soon, you'll be able to close the position for a gain regardless what the premium is. But is it EV+? What if crude goes sideways, or forbid, drops? Each day you're losing money to theta. Think of it as your underlying breakeven price going up each and every day. Might as well buy the underlying than pay 32%. In fact, selling the option cash-secured is probably better play.

If you want leverage, you can trade CL or ES. And yes, you can do interesting things with options which you can't do with just the underlying, e.g. selling naked cash-secured options or simple option strategies, but saying that it's "just leverage" is very wrong.

indeed, grim pm'd me and since then i have noticed him posting more advice stuff, unsure if i wasn't looking for it before and didn't notice or if there's been a change but he's definitely been posting some solid stuff

fwiw i think both he and ts contribute good stuff but both have the traits where if they disagree with someone else can just put on the argument feed bags and go at without resolution