
Ask HN: Crude oil price-linked ETF? - ptero
Are there options available to retail investor to go long on crude oil price? Ideally, a liquid &quot;oil price index&quot; ETF that would go up or down in sync with the price of crude.<p>A simple google search shows several funds with such goals (e.g., on https:&#x2F;&#x2F;etfdb.com&#x2F;themes&#x2F;long-crude-oil-etfs&#x2F; ), but with different performance over the same time period (both daily and YTD), which looks suspicious.
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pdovy
USO is probably the biggest, most liquid one available in the US.

Almost all of these funds will hold some combination of cash, short term debt
and oil futures, with the ratios depending on their target leverage.

Performance between them will vary depending on, among other things: whether
or not the ETF is levered, which particular type of crude it's tracking, it's
time horizon, and how effective the fund managers are at rolling their futures
holdings.

NOT investment advice. Commodities are fickle.

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wimgz
In times of cheap oil prices, the forward curve is often in contango.

That means that the price for a prompt delivery is cheaper than a delivery in
the future. So if you go long crude with futures, each month you have to roll
your contracts before they expire, and buy a more expensive one. So you end up
paying a premium.

Kinda like if you want to store oil to speculate, you have to pay for storage.

You might as well buy a basket of oil majors stocks, which are a pure play on
oil prices

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ptero
Agreed, which is why I do not want futures contracts, or any options with a
set time horizon. I consider the current price to be a fluke, I am willing to
make a significant bet that the prices will recover, but I do not know whether
it will take 3 months or 5 years; I am willing to wait it out.

I understand that this will effectively mean paying a "storage premium", but I
am looking to minimize such costs by pooling money with a large fund that does
this for a living and has tools and agreements that I do not have.

On a basket of oil majors as a proxy: sorry, this sounds suspicious. I think
there are a lot of factors beyond oil prices in play which should make those
pretty well decorrelated from _short term_ oil price movements. Is this really
true? Honest question.

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anonu
Good list is available
here:[https://pages.etflogic.io/?pg=cocroi](https://pages.etflogic.io/?pg=cocroi)

Note that there are no ETFs that actually hold barrels of oil. USO holds front
month futures. So you're also paying a role yield.

Consider equity ETFs like XLE which can provide a beta to crude if you're
looking to catch a falling knife

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lurquer
If there was a security that perfectly tracked the price of a commodity, why
would anyone invest in the commodity?

The commodity, after all, has actual costs (such as storage, insurance, and
transport.)

That is, if you were to buy 10,000 barrels of oil, there will be s cost for
you to store it. If that cost was absent from the mythical intangible
instrument that perfectly tracked oil, why would you or anyone else buy the
real thing for investment purposes?

Buying a 'synthetic' commodity -- that is, and instruments thst strives to
match the commodities price -- will force you to give up something; maybe the
amplitude of the swings in price, or a hefty chunk for transaction costs, or
other such things. (I believe 'backwardation' and 'contsngo' are the terms for
the factors that prevent a collection of future contract perfectly tracking
the percentage delta spot price of the underlying commodity.)

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throwaway3157
Check out BNO. It may be what you're looking for

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bigdict
You could do oil futures/options or basket of oil company stocks.

