USO has no April futures contracts. It's largest holdings are June and then July contracts. Don't use yahoo finance for research. It's wrong half the time because it take so long to update. http://www.uscfinvestments.com/holdings/uso
STAY OUT OF USO!!! Find an ETF of either oil and gas companies or an ETF of oil and exploration companies (that have a large volume of options). You can do the homework of looking those up. Eyes wide open... Do you really want to hire CPA to try and explain to the IRS how an LLP got liquidated?? IF YOU DO NOT EVEN UNDERSTAND THAT QUESTION, YOU SHOULD NOT BE IN IT!!!
This is stupid. USO was meant for speculators who couldn't afford to trade multiple oil contracts to be able to trade the yield curve of oil with reasonable tracking. It wasn't invented for professionals you absolute dunce. Professionals will trade the curve with a portfolio of actual CL contracts. Go ahead, I dare you to find one O&G hedge desk using USO. If an ETF liquidates the shares are paid out at their value at liquidation. You're typically notified a few weeks to a month in advance and can dump/request your shares be sold and a market maker will take them from you. ETF liquidation is a strict process. You're just causing panic for no reason. I hold 3 USO LEAPs at the moment dated Jan 2021. I had figured after it kept drawing I'd spend a few hundred on lottery tickets to catch a moon rocket. I will probably dump my LEAPs soon and eat my loss. The governors do not want the United States to open, there's so much oil we are literally running out of places to put it, and the travel season (usually a big season for consumption) is basically canceled. USO will probably be dead. If it gets liquidated I can't lose more than what I put into the options anyways. Stop panicking noobs.
This is the position I am interested in taking as well as the 2022 dates. My only worry is that will USO become the next XIV? Also I was curious if I sold Call credit spreads and received the premium and USO gets liquidated do I still get to keep the premiums?
You are correct in this part. It may be more like airlines or trucking companies will use it for a hedge. It is also an LLP. I'll repeat that, so it can sink in...It is also an LLP!! Does the government treat LLPs different than other ETFs? Yes!! If a LLP is liquidated, does it send a red flag to the IRS? Yes!! I have been audited 3 times...All with my wife. We had our ducks lined up in a row with my CPA before we went in. IRS auditors are not very bright. They want to find unpaid taxes quickly then move on. You could be there an hour explaining an unwound LLP (and not knowing what you're talking about). The auditor may reject your answers and say you had full knowledge of the LLP and may owe more in taxes. Or may ask for a revision of your taxes. Both cost money. You may need to hire a tax professional. I said may...LLPs CAN be tricky. When I had USO and showed my CPA the end of year statement, he suggested I get out of it and never return to that company. Yeah, so tell it to my CPA...He must be an idiot!! Yes, you are correct on the first part...But down the road, headaches could be ahead. If I remember...If the LLP does get unwound and it creates over $1,000. to your account, you need to file an extra 4 pages of documents to the IRS. Turbo Tax or H & R Block may not know what they are doing. Edited 5 minutes later. I went to Fidelity to buy 1 share of USO (just to see what would happen), no, I didn't buy. Below is the response...They are covering their ass. Error:(DI2002) You are placing an order for a security that requires you to execute Fidelity's Designated Investments Agreement for this account. Review and execute the Designated Investments Agreement, and review important information about this investment. If you do not agree to the terms of the agreement and review the important information, you may not purchase this security. For important information on these securities and their risks, see Master Limited Partnerships .
One more thing from Schwab... Taxes on distributions not received. According to the SEC, MLP unitholders may still need to pay applicable taxes even if the MLP doesn’t provide the unitholder with cash distributions. For example, “if debt owned by an MLP is discharged in a restructuring or bankruptcy, the amount of debt discharged may be treated as income,” meaning investors may owe income taxes despite not receiving a cash distribution.5 A restructuring or bankruptcy is rarely a good thing for investors, but in the case of MLPs it can add an additional headache when it comes to taxes. State taxes. According to the SEC, investors may need to file state tax returns in states that the MLP operates in, even if the investor doesn’t live in that state.6 MLPs held in retirement accounts. Sometimes an MLP will generate unrelated business taxable income, or UBTI, which could lead to a tax bill even if the MLP is held in a tax-deferred individual retirement account (IRA). While the income earned in a retirement account is generally tax deferred, UBTI may actually be taxed in an IRA. In other words, an investor holding an MLP in a retirement may still owe tax. If an MLP is held in a tax-deferred retirement account, it’s usually up to the MLP unitholder to send the Schedule K-1 to the IRA or retirement account custodian.
Could USO go under... If you thought the collapse in oil prices this week was bad, next month could be “fundamentally worse,” with prices falling to -$100 a barrel, says one energy strategist. “Oil is difficult to handle and if you can't put it anywhere, it becomes an environmental liability literally. So over this next month storage is now effectively full, you could see some extreme negatives in terms of prices offered,” Paul Sankey, managing director at Mizuho Group, told Yahoo Finance. “The problem in the market today is really one of infrastructure and storage. Of course the biggest problem being that demand is down at absolutely previously unseen levels in the modern era,” said Sankey. Crude prices could go negative again as 40 million barrels of Saudi oil are currently on route to the U.S. The shipment was agreed upon in March before much of the economy came to a grinding halt amid COVID-19. “Those barrels take 45 to 60 days to arrive. And we can see this a flotilla of tankers that are coming towards the U.S. market ... We really can't handle it at all.”