Market Overview

USO Tanks After Oil ETF's Temporary Trading Halt

USO Tanks After Oil ETF's Temporary Trading Halt

Trading in the United States Oil Fund LP ETF (NYSE: USO) was temporarily halted Tuesday morning. 

On Monday, the price of oil plummeted to historic lows as the coronavirus pandemic crushes demand. The USO ETF is popular with retail investors who are looking to gain exposure to crude oil futures.

USCF management is suspending the ability of the USO Authorized Purchasers to purchase new creation baskets until such time as the new USO registration statement for the additional shares has been declared effective by the according to the Form 8-K filed by the company. 

Creation baskets are the method by which ETFs create new shares to meet demand, and they hold the underlying securities, according to CNBC

The decision by the fund means that it's now trading with a fixed share count, similar to a closed-end mutual fund, CNBC said. 

USO said it will issue a subsequent current report on Form 8-K to announce the effectiveness of the above-mentioned registration statement offering the additional new shares as well as USO’s ability to resume offering Creation Baskets to its Authorized Purchasers.

The ETF was trading down 18.27% at $3.06 at the time of publication. 

Related Links:

US Oil Prices Plunge 40% As Storage Runs Out, Analyst Says Oil ETF Investors 'Likely To Burn Their Fingers'

Oil Prices Rebound, Analyst Says Market Faces Tsunami Of Surplus


Related Articles (USO)

View Comments and Join the Discussion!

Posted-In: CNBC OilNews Commodities Markets Movers Media Trading Ideas Best of Benzinga