With the way oil prices ran from $51.03 to $147.90 a barrel and then plummeted under $40 a barrel, many investors are considering to make their entry into the black gold market. While there are hundreds of oil companies out there to invest in, the risk is significantly greater than simply trading the price of oil. So how does an average retail investor trade the spot price?
The simplest and most direct way for most investors to make a bet on the price of oil is to buy shares of USO. USO is not a company, it’s simply an asset created to track the price of oil. DXO is another option for those who want to take more risk for greater returns. This ETF attempts to yield 200% the price of oil, whether it goes up or down. The gains made by this ETF can be massive in just a short time, as can be the losses.