If I buy shares in USO can it go bankrupt even if oil does not disappear?

Question

If I buy shares in USO can it go bankrupt even if oil does not disappear?

Answer 1

USO mainly holds oil futures.  Seems like they keep a large cash position as well.  As long as oil has value, USO will have value.

If they maintain their cash positions, USO could still maintain some value even if nobody was buying oil anymore.

I don't see it going bankrupt.  But it could still lose a lot of money.  It's not something I hold or intend to hold.  Maybe a good buy, in small amounts, if you want to hedge against further huge oil price increases.  I wouldn't bet the ranch - I think we just witnessed a little "bubble" in oil prices.

Answer 2

Highly unlikely. USO is an ETF that invests in futures for oil, gas, and heating oil, etc. It invests in a variety of contracts and options. You can read all about USO on Yahoo Finance, and look at the prospectus before you invest. This kind of investment is speculative. You should not do it with retirement money, or money you can't afford to lose. When you purchase shares of USO, you should also use a stop loss, in case the position goes against you, so that you take a small loss, rather than a large hit. Some etf's also have options for sale,to hedge your position. USO has options. You can buy a protective put or sell a call, as a hedge. Best of luck to you.

Answer 3

There are many reasons why companies go bankrupt, so yes.

Answer 4

To answer your specific question, yes, it can go bankrupt even if oil doesn't disappear.