USO Roll

Discussion in 'Energy Futures' started by xyannix, Mar 5, 2009.

  1. xyannix


    Tomorrow USO is going to start rolling from April into May.

    The last 3 times they made the spread go up to $6 - $8

    How high will it go this time?

    Right now the spread is in the low $2 range.

    Gotta love contango.
  2. Not meaning to be pedantic, but it's contango so it's actually how "low" will it go!! :D
  3. God, I need to get out more!! ha ha

  4. Haha!
  5. March/April contract spread (the one that closed FEB 20 th) touched $8 and then with good govt EIA stock pile report showing 'reducing stock piles ' finally March/April spread closed around $2 on FEB 20 th.

    If you look at last 2 reports the OPEC 4.5 million barrels cut is working and the $8 spread days are gone atleast for next few months.
    It seems this April/May contract spread ( as of now $2 ) may close on March 20 th in the range $2 - $4
  6. At this time I feel , the MAY/JUNE spread offer less risk and more return ( than APR/MAY ) . If one can buy now and wait on MAY/JUNE spread by the time around March 25 th , this will easily increase to $1.50

    APR/MAY spread $2.10
    MAY/JUNE spread $1.10

  7. xyannix


    Question is, will there be a crazy spike over the next few days while USO & the other guys roll.

    I am long @ $2.20.

    $6.00 will help pay the kids college tuition, $4.00 will be good for a new car.

  8. xyannix


    See attached chart.

    The problem is we can just as easily go into backwardation as we near May and then we are in the negatives again.

    I plan on being out of this trade Wednesday the latest.
  9. hmm.. we have to be careful as the contango nature changed in last few weeks with 'less stock piles'.

    instead of out right keeping spread , one of the strategies I am playing for last one week is get in and out of the APR/MAY spread in the range 1.90 to 2.15 , buying around 1.90 and selling and 2.15 range.
    to our surprise , the range is changing at least 2 times a day ( including Asian market time nymex 24 hour ) . espcially when the current APR contract goes crazy high the spread will reduce , today spread was as high as 2.20 , came down to 1.90 , some time ago 2.00 etc..

    Let us continue having more discussions so that we all can get better understanding hence better profits

  10. $2.20 is ok price, but you can get real bargain $2.00 range if you put a limit order and leave it . do not buy these spreads out right , put limit and leave it GTC , in asian time or other APR contract spikes/downs it get filled
    you know $0.20 cents make huge difference as we buy lots of lots with these spreads
    by the way who is your broker
    #10     Mar 6, 2009