How to buy oil

CFA General
#1

does anyone know what stock or ETF i should buy if i think the price of oil will go up? waht stock has the most direct relation to the price of oil? thanks!

#2

i’m pretty sure USO is the ETF you’re looking for

#3

jimjohn Wrote: ------------------------------------------------------- > does anyone know what stock or ETF i should buy if > i think the price of oil will go up? waht stock > has the most direct relation to the price of oil? > thanks! Just buy Oil Futures… or ERX (3X Levered Energy Bull Fund)

#4

DIG is my favorite.

#5

thanks guys.

#6

contango issues when dealing with USO, no? someone who knows more about this topic could probably explain the underlying issues…

#7

DIG and DUG are the worst etfs i have ever traded. They dont move like the other ultra etfs because XOM is such a large weighting. DXO is good for oil

#8

I’m not sure what the methodology is for rolling the future contracts in USO, but you definitely will have a problem if the market is in extreme contango, or at least from backwardation moving toward contango. Effectively, you’ll have a negative roll yield, and that will eat away into the return of that ETF. I want to look into this a bit more, especially how that darn instrument is traded because USO hasn’t really seem to capture oil movements fairly accurately.

#9

anyone want to shed some light how a typical ETF is constructed and traded? thanks