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Oil Etf How the stock price of United States Oil ETF (USO) are able to reflect the price of oil? It is far from being mirrored exactly, but it is not very far closer than any other oil ETFs that I saw (is there a better one?). Futures contracts are too complicated and short-term, so I am considering this ETF to hold long term. ETF achieves this by maintaining oil futures real. There are also institutional investors can redeem their ETF shares for the underlying assets (an individual investor is not given this privilege). Well, when oil prices decline, some investors panic and sell their shares of the ETF. It takes a little longer to imitate because the price of the ETF is more inelastic, investors are taking longer to make decisions, like how food prices have not declined as rapidly as prices Oil has fallen. I think it is difficult for the oil ETF to reflect the price of oil in the short term but long term it would be better. DONT GO TO THE SITE Eliathas Q Posted on January 16, 2010.
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