Should I Buy United States Oil Fund (USO)? Finance YouTuber Analysis

The YouTuber recommends using options on the USO fund to play a potential spike in oil prices if the US strikes Iran. He outlines a specific call option strategy (buying $85 strike calls and selling $90 strike calls) to achieve a leveraged return if the fund surpasses $90.

“I like the oil company stocks better for a longerterm investment, but options on the USO give you a leveraged way to play the possibility of a surprise strike against Iran.”

The YouTuber suggests USO as a way to benefit from dollar weakness, as commodities denominated in dollars will see their dollar price rise if the dollar falls. This is part of a broader theme of investing in real assets that hold their value.

“and so we can use that same theme with other Commodities as well using funds like the United States oil Fund ticker Uso which holds oil Futures with the global X copper miners ETF the ticker opx any commodity or real asset that's gold oil copper even real estate that is denominated in dollars so priced in dollars that asset is going to hold its value so if the dollar does fall then the price in dollars for that asset is going to rise.”

The YouTuber suggests a put back spread strategy on USO, anticipating that the price of oil will come down. He believes that easing geopolitical tensions, increased US supply, and softening demand will lead to lower crude prices, offering unlimited upside potential if oil sinks further.

“Of course the idea here is that the price of oil comes back down and you have that unlimited upside potential as the price sinks further before May expiration.”

The YouTuber suggests buying USO (United States Oil Fund) as it benefits when the world is at war. He notes its current price around $80.60 and emphasizes that buying shares is a safer approach than options for this play.

“Another one that's going to get busy tomorrow is USO. All right. And so this one is sitting at $80.60. The ticker symbol on this one is USO, United States Oil Fund. These are just the things that benefit when the world is at war.”

Hoium strongly advises against buying and holding the US Oil Fund (USO) for long-term investment. He explains that due to its structure of buying and rolling oil futures contracts, it consistently fails to track the spot price of oil over time and destroys value for buy-and-hold investors.

“the problem with this fund is they're not able to track the spot Market because they're actually buying few Futures... over time what this does is destroys value of the stock in the ETF itself”