Trading is active in the US Oil Fund (USO) Tuesday morning. Some traders are leaning on the bearish side of the trade, even as crude oil sits not far from record highs (recently unchanged at $107.90 a barrel). 19,000 USO puts have traded, compared to 2,039 calls. Bearish sentiment is 69 percent. With the fund trading down 35 cents to $85.28, much of the action is in the April 83 puts. The bearish positioning comes ahead of weekly inventory data due out Wednesday morning. (Note: the USO is designed to track crude oil prices, but tends to underperform the commodity itself due to the fact that the fund must continually roll forward futures contracts. For example, over the past month (since 2/11), crude is up from $91.77 a barrel, or 17.6 percent. During that time, USO is up 14.4 percent.)
Category: All ETFs
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.