@dutybound OOO does not follow the spot price. Thats clearly stated in the investment documents. It closely follows the WTI futures price, which is different to the spot price. Think of it this way, buying at the spot price requires you to take delivery (handle applicable shipping, insurance and storage costs). Buying a futures contract is merely an Irrevocable right to buy at some future point (3 months out in the case of OOO today), which only turns into an actual order if you don’t roll out (which OOO does monthly). Trading futures effectively means you always roll out, you NEVER own the asset. You accept market backwardation/contango as pluses or minuses to your profits/losses, just as you accept fund administrative charges.
Your 1/4/20 to 4/6/20 assessment is misleading and not an accurate reflection of the OOO ETF today because on 1/4/20 OOO was exposed to the one month out WTI Futures NOT, as it is today, the 3 month out WTI Futures. I would add that holders of OOO in April 2020 ‘dodged a bullet’ in the sense that the oil price went negative and OOO was at a very real risk of being wiped out entirely (which was the catalyst for the ETF changing to the 3 month contract).
Also, for what its worth, i didn't pick the OOO bottom (which was about 15% lower than my buy price). It would have merely been a fluke if I had. I bought in because oil futures were at about $25 and I thought they would go towards $40 within 3 months based on reopenings. As at today, i believe I may have underestimated that and think we will get into the mid-high 40’s within my 3 month timeframe.
i suspect you see this as a bad investment because you lost money. I understand that. However, from your comments, it seems to me you also may not fully understand the investment structure.
OOO Price at posting:
$19.36 Sentiment: Buy Disclosure: Held
