Question on oil ETFs - to buy and which one?

I am looking at these oil ETFs and they all seem like a decent value buy. USO seems to have the largest market cap. The ETFs i have looked at are the following
USO
DBO
(now both track oil and have different ways of tracking with different fees). USO seems to have outperformed but seems like DBO is a better buy depending on whether the market is contango/backwardation
The other ETF i am looking at is IEZ

My question is
- Can these ETFs go bankrupt?
- To the which one to buy, one simple way would be to buy all 3
- Regarding the timing, might be prudent to average in (of course with the risk of missing out); of course this is almost catching a falling knife
- Selling 1 put should assign you 100 shares right?

Now another strategy could be to sell puts but not sure if there is an assignment fee for my TOS account
Update: Some of these ETFs have a 0 price to sell puts

USO invests in prompt month futures. Every month they roll from month 1 to month 2.
USL invests in the prompt 12 month futures rate-ably. Every month they roll from month 1 to month 13.
DBO I am less sure about. It appears they invests in the prompt 12 month futures and every month they roll from month 1 to any month in the prompt 13 that they believe offers the most value.

All comes to roll yield.

ETFs investing in markets that are continually are in contango generally underperform futures.
ETFs investing in markets that are continually are in backwardation generally outperform futures.

@jokertrader you can trade futures. Why would you buy a tax-disadvantaged, roll yield disadvantaged, fee disadvantaged ETF?

jokertrader 

Question on oil ETFs - to buy and which one? I am looking at these oil ETFs and they all seem like a decent value buy. USO seems to have the largest market cap. The ETFs i have looked at are the following USO DBO (now both track oil and have different ways of tracking with different fees). USO seems to have outperformed but seems like DBO is a better buy depending on whether the market is contango/backwardation The other ETF i am looking at is IEZ My question is - Can these ETFs go bankrupt? - To the which one to buy, one simple way would be to buy all 3 - Regarding the timing, might be prudent to average in (of course with the risk of missing out); of course this is almost catching a falling knife - Selling 1 put should assign you 100 shares right? Now another strategy could be to sell puts but not sure if there is an assignment fee for my TOS account Update: Some of these ETFs have a 0 price to sell puts

I'm with @SMCJB on this one -- don't know if this is a continuous back adjusted chart of CL or not, but this shows the 5-year difference between CL and USO. Also, while I wouldn't expect USO to go under, ETFs have done this. I was very long XIV the day they blew up (after the cash close, it bled down 80-90% I think, from 4pm to 8pm). So, anything can happen.


Rather than averaging in, why not wait for the market to put in a bit of a floor? People buying equities down 10% thought that was the dip. Same for those buying at 20% down. Many crude buyers no doubt bought on Sunday/Monday, thinking that a 35% weekend drop was a can't miss, and that "it can't go lower." It always can. Not trying to offer trading advice, just saying that the bull thesis for crude is pretty weak. Low global demand driven by a global pandemic coupled with a price war.. buying something on sale just because it's on sale is not usually a good idea. But I'm not a crude trader these days so no doubt there are many nuances here I'm not privy to.

josh 

I'm with @SMCJB on this one

Thanks

josh 

-- don't know if this is a continuous back adjusted chart of CL or not, but this shows the 5-year difference between CL and USO.

Roll Yield!

josh 

Also, while I wouldn't expect USO to go under, ETFs have done this.

Ohh it's happened THIS WEEK in oil as well

Bloomberg: Two Leveraged Oil Products to Shut Down in Wake of Epic Crash
https://www.msn.com/

josh 

I was very long XIV the day they blew up (after the cash close, it bled down 80-90% I think, from 4pm to 8pm).

Sorry to hear that but it was (retoractively) inevitable.

Thanks for the above thoughts.
After some more thought, i agree. Since we are talking strictly taking a directional view on oil (relative trades are different), my goal was to minimize risk with a low stress way of expressing a directional view on CL.

In my mind, the reason I agree to possibly trading the futures even for a longer term,low stress strategy is the following
- No risk of the ETF blowing up (even if it was USO i was considering)
- As mentioned, why hold the ETF which will underperform and have tax disadvantages
- Ability to hedge easily if i am incorrect with a reverse position

If limiting risk was another factor, i can always express this directional view by lowering my risk (spreads/flys etc)
What is to say i cannot trade a smaller duration width spread (like a 1 month) far in the future thereby eliminating roll yield loss at least for sometime and roll when the time comes

Now if i think that a sector ETF or stock (like IEZ or CCL) has been beaten up pretty badly, then thats a different trade and why maybe no easy way of expressing that with futures

CNBC: Oil falls 24% in 3rd worst day on record, sinks to more than 18-year low.
https://www.cnbc.com/2020/03/18/oil-plummets-to-near-18-year-low-on-pace-for-worst-month-ever.html

Sent using the NexusFi mobile app

Anyone got the current WTI price for April contracts? I have a massive spike down on the chart

Sent from my CLT-L09 using Tapatalk

it reopens in 15 mins. Currently 2206/2298 vs 2037 settle but the preopen just began and that will probably change before we actually open.

AHH ok. First futures trade and was wondering if I had screwed up/if they had a tech issue. Thank you very much for the speedy response

*Editted: figured out the subsequent question hence why I removed it. Thanks

Sent from my CLT-L09 using Tapatalk

Don't forget April expires Friday! Could be wild last two days.
Globex is locked limit up on the reopen. May is 2284 choice vs 2083 settle
April is 2206/2258 vs 2037 settle but will be tighter once implication switches on.