Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

USO Investigated By CFTC Over Price Moves

Tyler Durden at Zero Hedge reports on a possible looming ETF disaster.  (Follow-up to Crude Talk by Adam Warner.) – Ilene

 

USO Investigated By CFTC Over Price Moves

Courtesy of Tyler Durden at Zero Hedge

The ETF bubble looks like it may be the next one to burst. WSJ just out that the CFTC is probing the USO ETF for price moves coinciding with trades in and out of crude-oil contracts. The USO has recently gotten prominent media attention over allegations that it is a perpetually value bleeding asset, and potentially a pyramid structure.

The Commodity Futures Trading Commission confirmed late Thursday that its enforcement staff is investigating USO concerning its so-called "roll" into a new contract on Feb. 6. The scrutiny is part of a broader probe into the oil market.

"The CFTC takes seriously issues surrounding price movements in our nation’s vital energy markets," acting CFTC Enforcement Director Stephen J. Obie said.

USO has grown so large in recent months — its holdings account for 20% of all April crude futures contracts on the New York Mercantile Exchange and about 30% of the contracts on ICE Futures Europe — that it has a noticeable effect on oil prices when it moves in and out of contracts each month.

It is not clear what would happen to the USO in case impropriety is found and the fund is forced to shutdown and unwind it massive futures positions. Nonetheless, this could be a harbinger of increasing regulatory intervention in other ETFs which have seen a huge rise in trading in recent months.

 


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!