Again, the explanation for the underperformance is very simple, no conspiracy theories. As Cutten pointed out there is one simple reason: Contango. You will see that this underperformance vanishes when you plot or measure the USO ETF performance vs an investment strategy that rolls over the front month future each momth at random dates in the month that leads to the last trading day
And I agree!!! ETF's 'sound' like the perfect way to buy oil, ng, real estate, indices, etc., but they're not! Now playing options on ETF's is a different story. Lol
incorrect, options on those ETFs are the absolute same story. For long term plays try to isolate stocks that have a relative pure exposure to only natural gas or only oil. There are quite a number choices. When you correlate them with oil or natural gas spot they do work actually quite well. Of course you need to adjust for the beta and trade some broad market index against it to isolate the sector specific exposure and for that equity index futures should do just fine.
Just wish I understood more of what you just said asianprop. I'm finding I have that little bit of options "knowledge to be dangerous."
You're implying you've got the secret solution to this problem. What other way is there to play the long term swings in oil, for those of us who don't have access to storage facilities? Only other way I can think of would be to buy a basket of oil-company stocks (like asiaprop suggests). But I haven't investigated the ins and outs of this strategy.
There is no scam. You have toi understand how the product works. You didn't do any research and obviously didn't read any of the numerous articles on USO done by people who did the research for you.