USO and the price of oil

[EliteTraderNYC]

Does USO strictly track the price of oil for example 1% move in oil corresponds to 1% up in USO, right? Or am I missing something? Anyone do a regression analysis?

Also, what about OIL, does that track the price of oil directly?

 

[Surdo]

Quote from EliteTraderNYC:

Does USO strictly track the price of oil for example 1% move in oil corresponds to 1% up in USO, right? Or am I missing something? Anyone do a regression analysis?

Also, what about OIL, does that track the price of oil directly?

Why do you care, are you trying to ARB a cunt hair inefficiency between the ETF and future?

el surdo

 

[total_keops]

No. Not over the long term.
It is a basket of futures on oil. Therefore you have cotango, backwardation, rolldown issues, ...
Read the prospectus.

 

[total_keops]

Quote from Surdo:

They are both ETF's comprised of stocks

I believe that they do not hold stocks.

 

[Surdo]

Quote from total_keops:

I believe that they do not hold stocks.

You are correct sir!

 

[EliteTraderNYC]

I want to make sure that if I place a 2-4 week trade in oil, the ETF will reflect what my projections for the price will be.

 

[Random.Capital]

Quote from EliteTraderNYC:

I want to make sure that if I place a 2-4 week trade in oil, the ETF will reflect what my projections for the price will be.

When you pull the last few years worth of prices into Excel (or wherever), what does it tell you?

 

[clacy]

Go to stocharts.com and set up a perfchart with:

$WTIC,USO

Then adjust it to 1-6 week periods and observe for yourself how closely USO tracks light sweet crude.

There will be some tracking error regardless, but how much tracking error you can accept is relative to you.

 

[EliteTraderNYC]

Thanks, the variation is far below 1% for the past 30 days, works for me.

 

[nazzdack]

Quote from EliteTraderNYC:
----2-4 week trade in oil....
----ETF will reflect what my projections....

Dude, this aint gonna end "well". :eek: :eek: