Whether you believe the price of oil is going to continue to rise or is poised for a fall, oil ETFs are a good way for investors to establish exposure to dynamic oil prices. Oil ETFs offer exposure to the spot price of oil (the price you would pay today) or exposure to the future price of oil.
Victoria Bay Asset Management’s United States Oil Fund (Amex: USO) tracks the spot price of crude oil using futures contracts and other oil related futures, forwards, and swap contracts. The fund is marginable and short selling is allowed. Options on USO are also available. Read more at USOF’s website.
Barclay’s iPath S&P GSCI Crude Oil Total Return Index ETN (NYSEArca: OIL) tracks an index of crude oil futures contracts that are at least 5 months from expiration. ETN stands for Exchange Traded Note which means that you are buying an unsecured debt security. You should also consult with your tax advisor to get the latest guidance on OIL’s tax treatment. Read more at the iPath ETN website.