USO and UNG: How Safe Are They?

Discussion in 'Stocks' started by arizonadreamer, Dec 31, 2008.

  1. Hello Everyone.

    I was just wondering about the limited partnerships, USO and UNG. I often trade these animals in conjunction with various options positions with an average holding time of one to six weeks. My question for you to ponder is this: How safe are they really? I am not talking about the movement of the underlying instruments they are designed to track, but I am talking about USO and UNG themselves.

    With everything that has happened in the past year or so (bankruptcies, scandals, etc.), what are the chances that there would be a big blunder regarding contango or backwardation, or some type of mismanagement or even deliberate fraud with USO or UNG that would destroy the price?

    What do you all think?