I bought 500 shares at $4 and am wondering how long can I hold onto it? I know the next 6 weeks are going to be really bad but I'm also wondering as an ETF, how does it behave in regards to money invested? Is it something I hold onto and ride out past June Futures expiration or does it automatically liquidate if it goes to 0?
The fund holds some of the forward months. A good read: https://www.google.com/amp/s/www.fo...s-the-culprit-behind-oils-massive-plunge/amp/
@thyrus, its anyone's guess, next 30 days will reveal itself, just hope that the ETF doesnt get closed. IMO short term drop below $3 (see pre-maket), let the May oil contract futures expire, then see what June contracts settle in at ... from there, who knows. Although consider bailing or take a small loss or maybe a 'set' hold for 30 days see if it comes back. hindsight 20/20 I posted on the other thread a vertical ITM spread would likely be smaller cash loss or a minimum 20% gain 30 days in the right direction. A thought for future trades.
Why does an Oil ETF, have T Bills in it's holdings ? Some weird arb/hedge with 1.44% ? A hidden deal with FED ? (disclaimer : my knowledge is very limited, when it comes to ETF's , - never touch them)
If you look at storage capacity and tanker information that is readily available, this is clearly something that will be fine once demand goes up just a little. US Shale production was never profitable at these low prices and they needed to stop producing a while back. it's all about the demand from when people start driving to work again, which will happen before the end of summer, but the panic is related to the futures contract expiration from alot of clueless traders as opposed to actual OIL. Still, I don't want to be held hostage by a bunch of people ready to panic, so I might just cut losses in the 3's this week.
too small to think about, more detail in the ETFdb link https://www.etf.com/USO#overview FWIW, on USO, based on historical performance, it doesn't appear to be a long term hold, even 3-5 years
This is quite useful https://ftalphaville.ft.com/2020/04/21/1587427987000/The-United-States-Oil-Fund-mystery--revived/ GAT