I'm new to the investing world. Just invested in silver bullion and I'd like to invest in OIL as well. Do you think a trading platform is a good option? I actually don't know other ways...
You can buy USO if you have a brokerage account. Be aware that it does not track the futures/cash price perfectly as it has to pay the contango.
Are you looking to utilize futures or ETFs? If you are looking to utilize futures for a long term investment need to be well capitalized and probably chat with a broker first to understand mechanics, margins, diff. strategies to go about it etc.
RBC was USOs only clearer and they said they won't clear USO anymore. So unless they find a new clearer USO won't be tracking a basket of oil at all.
USO is going to have a harder time of it tracking oil. The ETF is running out of investment vehicle options. And the roll slippage is not insignificant.
They were 30% of the open interest in June, which has now expired, but CME told them to roll and to get further along the curve to stop another negative incident.
I always thought that the USO ETF managers were insane in the membrane for not holding more contracts further out in the curve. The bid/ask is thinner than the prompt month, but they can dink and doink it all day every day because the exchange spread liquidity is there to do it.
It depends on the market volatility. If oil is volatile, then it’s good to invest in that since you can earn exponential profits on it by applying your different strategies that may include scalping or hedging etc. I would suggest to always keep in mind that the market volatility for the particular pair you want to trade in, since everything rolls around the market only.
Take a look at USL. I believe it has equal weighted holdings in the first 12 months of WTI, so that eliminates a lot of the roll yield penalty of a contango market. Maybe not as liquid as USO, but a more generic diversified tracking ETF of WTI. http://www.uscfinvestments.com/usl