Puts Active on the US Oil Fund (USO)

Shares of the United States Oil Fund (USO) are trading lower on the session by 0.19% at $31.91. The stock has been cascading lower over the past two months, pushing to fresh four month lows yesterday.

With shares off nearly 15% in six weeks, there is some interesting positioning in the puts today. A short while ago the December $30.50 put was sold 10,000 times, on the bid, for $1.11 just as 10,000 November $32.00 puts were purchased, near the offer, for $1.15.

Given the current open interest on both strikes, 1,227 and 30,437 contracts respectively, this appears to be a roll of a short put position from Nov to Dec.

What is unclear is whether this large, institutional sized position is a hedge to current short stock. If that were the case, the thesis would remain bearish for the USO.

The United States Oil Fund seeks to reflect the performance less expenses of the spot price of West Texas Intermediate (WTI) light sweet crude oil. 

About Michael Zerinskas

Originally from Chicago, Michael J. Zerinskas began his career as an intern for a small high-frequency trading firm based at the CME; he then moved on to become Chief Options Strategist at Benzinga.com. Michael is now Unusual Activity Editor at The Options Insider, specializing in VIX, volatility, and flagging unusual activity.