For anyone interested in the crash and negative valuation of the May crude oil/WTI contracts, the Chairman/CEO of the CME Terry Duffy was on CNBC earlier defending that it was working normally after Harold Hamm called for an investigation. He makes some comments about the retail investor, too.
I held USO for a little while and got the hell out when I could because I realized it was not what I signed up for. Clearly it's a case of the retail investor being told to go INDEX INDEX INDEX ETF THIS MUTUAL FUND THAT....only to realize this was no ordinary ETF.
Man, what I saw on Monday/Tuesday was absolutely absurd. I even saw other order amounts going through that I've never seen in succession (volume wise). I'm glad you got out. I definitely agree with you, have to watch etf/p/n type funds etc., especially when they have an expiration dates/ending, just a mess... I mean some of these basically end/get delisted (well worse than delisting from what I've seen) - so you really want to watch these. I honestly didn't know how bad USO was either. But something worse is happening on the ticker OIL - it's getting removed I think next week iirc and people can still trade it, similar to what happened w/ UWT., anyway options were getting traded like everything was fine and it just fell apart I think on Tuesday for oil, people are basically stuck with trash options from what I saw. Like out to 2022 - all options dumped to $1. I think these options were going as high as $90+ for a year + out and they just tanked hard. Such bs... Anyway, I'm definitely watching these a lot closer, I typically just do stocks and have been slowly learning more over time on these but have been trying to be careful. So def agree with you
I believe you’re talking about this with regards to OIL : https://finance.yahoo.com/news/barclays-announces-redemption-ipath-series-001100135. https://www.thestreet.com/etffocus/...est-oil-etns-will-be-shut-down-and-liquidated
Took out a line of credit 2 days ago and put 70k on USL longs and DBO. I cant believe oil was at 12 dollars. Jesus.
The only reason it crashed was because USO had no where to dump the contracts. If you watch Dan interview he said that it went negative because they had no where to store the oil but the government allowed the SPR to take the oil that was stuck. This allowed May to go back into positive. https://twitter.com/SecBrouillette Only reason oil went negative was because of this: http://www.energyintel.com/pages/ei...ly+Caused+the+Epic+WTI+Meltdown?-1070546&ts=1 Gave a great buying opportunity
.... It's dangerous to buy USO because it has "oil" in it and not know it has futures contracts. You gave bad advice to noobs like @Sajan who will likely go belly up because USO primarily consists of futures, and it is something that could go negative with June futures still to come. A quick glance at it's info would show you the USO does not correlate with the spot price of oil today, and many regulators are talking about shutting down such a useless fund. It was a mistake lots of noobs made, some of them basketball forum investment experts , some not https://www.cnbc.com/2020/04/23/you...t-even-tracking-the-price-of-oil-anymore.html
anyone in BX? up 6% so far today; 2nd attempt, on this current uptrend, trying to break thru the 50 MA
I got out before it plummeted Monday. Whew! Ya I lost my profits from my previous trades but nothing I can't get back. Just glad I got out of USO before it get probably goes belly up.
This apparently leaked news just hit the market : Data on Gilead’s remdesivir, released by accident, show no benefit for coronavirus patients. Company still sees reason for hope https://www.statnews.com/2020/04/23...ent-show-no-benefit-for-coronavirus-patients/
Yes, this was it, I couldn't recall exactly the details, but was trying to alert people in case they saw some pretend value buy etc.
Regarding the remdesivir leak, if you read the story above there may still be hope since there are multiple trials being conducted. We should know more by next month, apparently. Here is a Gilead response (excerpt) from the above story : Gilead spokesperson Amy Flood said the company believes “the post included inappropriate characterization of the study.” Because the study was stopped early because it had too few patients, she said, it cannot “enable statistically meaningful conclusions.” However, she said, “trends in the data suggest a potential benefit for remdesivir, particularly among patients treated early in disease.” The data (for details, see screenshot below) will be closely scrutinized but are also likely imperfect. The study was terminated prematurely, which could have affected the results. The context that would be provided by a full manuscript is missing, and the data have not been reviewed as normally occurs before publication. It's interesting to see the market hasn't completely gotten wrecked even though it did dive on the news.
This isn't true. USO was already out of all the May contracts well before the Monday meltdown. That was Wall Street futures investors who were still stuck holding onto their positions near expiration. USO gets out of its positions about 2 weeks in advance of expiration.
Yup. “It’s important to note that USO is no longer in the May contract. USO’s methodology is to roll out of their contracts two weeks prior to expiration, so, actually, they rolled out of May into June the week of April 7,” Akins said. “So, with respect to what’s going on currently with ... that huge disconnect between the price of May contracts and June contracts, it is not directly related to USO even though USO ... does own a significant percentage of contracts of the month they’re currently holding.”
Stay safe out there : Young investors rush into struggling oil ETF that isn’t even tracking the price of oil anymore https://www.cnbc.com/2020/04/23/you...t-even-tracking-the-price-of-oil-anymore.html _________________________________ Excerpt : Retail investors mistakenly thought this fund was a proxy for the “spot,” or cash, price of oil, and bought in as its price plummeted. It isn’t: The purpose of the ETF is to track the front-month oil futures contract. And after changing its structure multiple times in the past one week, the fund couldn’t even do that correctly. Still, USO was the most-bought name on Robinhood, a free stock-trading app that has attracted roughly 10 million, mostly millennial, users. By Wednesday, it was among the top 30 most-held names on Robinhood, according to the start-up.
True basket ETFs that truly track something like the S&P 500 are good products for the average investor. It does a couple things: it automatically diversifies your portfolio. It cuts management costs. It allows an average investor access to aftermarket and premarket futures (through the ETF) that they wouldn't normally have access to. There are a bunch of terrible ETFs out there though. Speculative, highly leveraged ETFs with little underlying assets. No bueno.
Ya, I am familiar with the "G" rated ETFs. Most of my stuff is in those at Vanguard. I wasn't ready for "R" rated USO lol. You live and you learn. Didn't lose much. https://www.bloomberg.com/news/articles/2014-06-04/this-etf-is-rated-r G Anything that holds developed market stocks or bonds using standard market capitalization-weighted indexes. This is for straightforward ETFs with no complicated tax implications. Think Vanguard. Examples: iShares Core S&P 500 ETF (IVV ), Vanguard Short-Term Government Bond ETF (VGSH ) PG Any ETF that track stocks or bonds but uses an index that isn't weighted by market cap and that attempts to outperform the market, like smart-beta and actively managed ETFs. This category would also include physically backed commodity ETFs such as gold and silver. Examples: Guggenheim S&P 500 Equal Weight ETF (RSP ), SPDR Gold Shares (GLD ) PG-13 China , master-limited partnerships , mortgage REITs , currency- and interest-rate hedged ETFs and alternative strategies -- get a PG-13. Examples: iShares MSCI Frontier Markets 100 (FM ), PowerShares Senior Loan Portfolio (BKLN ) R Not suitable for retail investors. Any ETF that predominately holds derivatives such as swaps or futures. This includes all leveraged and inverse ETFs plus all single-commodity ETFs that hold futures contracts. Non-leveraged exchange-traded notes and volatility (VIX) products also fall in here. If a bitcoin ETF comes out, it would land here. Examples: Direxion Daily Gold Miners Bull 3x Shares (NUGT ), United States Natural Gas Fund (UNG ) NC-17 Any leveraged ETN, in which investors get the double dose of leverage and credit risk. These are those rare products that make -- or should make -- even professional investors think twice. Examples: VelocityShares Daily 2x VIX Short-Term ETN (TVIX )
