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USO Options Hot As ETF Extends Skid

The United States Oil Fund (NYSE:USOhas been in a freefall amid the collapse of oil prices in recent weeks. After slowly giving back gains throughout the day, December-dated crude futures fell 0.4% to trade at $59.93 per barrel, marking their 11th straight loss — the longest losing streak in over 30 years. As far as the exchange-traded fund (ETF), USO is down 0.3% to trade at $12.66 — set for its own 11-day losing streak — but one options trader is betting on an end to this sharp pullback.

At last check, nearly 192,000 USO puts have been traded — three times what’s typically seen at this point in the day, with volume pacing for the 99th percentile of its annual range. According to Trade-Alert, one trader sold to open 156,000 January 2019 11.50-strike puts, for about $3 million. By doing so, the trader expects the oil ETF to hold above the $11.50 level through January options expiration.

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