It normally follows the WTI Futures of the next month, so traditional WTI May Futures price. However, due to the wild swings in the market earlier in the week, OOO ETF decided to trade SEpt 20 futures or 3 months ahead because it's not as volatile. It's going to do this until the markets in oil settle down.
But to explain what it's supposed to do, by example, if the WTI Sept futures contract moves up 5% overnight, then OOO should open up by 5%, however the ETF will track the WTI's movement all day because the futures contracts only close after US market close on Saturday morning our time and then re-open at 8am on Monday morning. Other than that, they trade 24 hours a day and move constantly during our trading day following the WTI futures price.
However this week BetaShares, decided to screw us all but moving their exposure from the May WTI futures contract to the Sept one only after the oil price recovered by 30% during the night, and told us 5 minutes before market open which basically trapped anyone who has bought the previous day, so they weren't able to enjoy the rally by 30%, then another 25-30% in the two days that followed. They basically robbed us of the upside in the May futures contract that everyone lost nearly 40% on during the two previous trading days. by exposing us to the Sept contract, the movements to the upside were muted.
The way i see it, even the Sept futures were up more than 10-15%, but the OOO ETF has basically gone up less than 6%.
Hence the warnings that you have seen on the previous posts about this ETF.
I think the strategy that oil futures will recover and revert back to the average of USD60 will happen over the next few years is solid, what's not kosher is BetaShares changing strategy after we locked in the losses and weren't able to enjoy the upside from the rebound. Instead of seeing oil futures bounce from $USD12 to perhaps $USD65 over the next few years resulting in a 5 bagger, your going to see the gain start from USD27 ( which is the current price of the WTI Sept futures contract ) to USD65 meaning just over double. That could all change if they revert back to the following month WTI futures when oil prices settle.
