After analyzing and comparing the various contangos each fund experienced, Dion concluded that potential oil ETF investors should choose to go long with DBO, then USL, or OLO as an ETN alternative. Over the short-term, USO and OIL may be a better pick for day traders since they both have a larger liquidity.
Additionally, there are the more sophisticated oil ETF tools.
Short oil.
- PowerShares DB Crude Oil Short ETN (NYSEArca: SZO). SZO does not use the Optimum Yield Index.
- United States Short Oil (NYSEArca: DNO). DNO shorts the near-month futures contract, and the fund has a higher volume than SZO.
Leveraged long. It should be noted that leveraged ETFs are subject to compounding errors and should only be used for short periods.
- PowerShares DB Crude Oil Dble Long ETN (NYSEArca: DXO).
- ProShares Ultra DJ-UBS Crude Oil (NYSEArca: UCO).
Leveraged short.
- PowerShares DB Crude Oil Dble Short ETN (NYSEArca: DTO). DTO resets monthly.
- ProShares UltraShort DJ-UBS Crude Oil (NYSEArca: SCO). SCO resets daily.
For more information on oil, visit our oil category.
Max Chen contributed to this article.