USO Facts

A

Asparagus

anyone know why USO is trading at a 6.73% premium to NAV? seems to be correcting itself today -

was this holiday related?

As of 12/24/2008
USO Facts
Ticker

USO
IIV

USO.IV
Listing Exchange

NYSE Arca
CUSIP

91232N108
ISIN

US91232N1081
Closing Price

$29.02
NAV

$27.19
Premium / (Discount)

6.73%
Shares Outstanding

66,700,000
 
I know this is not a futures question directly but maybe someone can explain this. So why are shares of the ETF USO trading so low vs crude oil, compared to 2008.

Let me explain:

On September 12th of 2008 I bought 20 shares of USO for $80.00 and Crude was trading at $100.

Today USO is trading around $40 and Crude is trading back up to around $100. This means USO is trading at half what is was in 2008.

This make no sense to me. My USO shares are down 50% and Oil is trading where it was when I bought the shares of USO in 2008. Price at the pump is even higher.

Can anyone explain this?
 
Quote from JayhawkTrader:

I know this is not a futures question directly but maybe someone can explain this. So why are shares of the ETF USO trading so low vs crude oil, compared to 2008.

Let me explain:

On September 12th of 2008 I bought 20 shares of USO for $80.00 and Crude was trading at $100.

Today USO is trading around $40 and Crude is trading back up to around $100. This means USO is trading at half what is was in 2008.

This make no sense to me. My USO shares are down 50% and Oil is trading where it was when I bought the shares of USO in 2008. Price at the pump is even higher.

Can anyone explain this?
More...

Sure. You bought oil right? Did it ever occur to you that you can't store oil in the freezer? Someone has to store that oil you bought. They also have to insure it. Do you think people offer those services for free? I assure they don't. The cost of storing oil since 2008 has been very high. You paid that cost. That means if you buy oil, it has to go up by more then the cost of storage and insurance for you to make money. Do you understand this now?
 
Quote from JayhawkTrader:

Thanks for the explanation. Guess it's time to cut my losses. Why would anyone invest in this shit then....long term.
More...

They don't invest long term. The only long term investors are in the cash market. They buy the physical, store it and sell the forward. USO is not the same thing as AAPL. If you want long term exposure to energy, buy the producers and collect the divie.
 
Quote from Maverick74:

They don't invest long term. The only long term investors are in the cash market. They buy the physical, store it and sell the forward. USO is not the same thing as AAPL. If you want long term exposure to energy, buy the producers and collect the divie.
More...

+1. don't even get me started on ung...anyone that says "i held ung for a year and lost 75% when spot only lost 25% - what happened?" should not be allowed to vote.
 
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