USO is $18 Today! What Happened and Will I Sell now?
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Today we talk about USO the oil ETF! it is at like $18 today! Yesterday i bought USO for $2.13. So many people think I either made a ton of money or lost month. Both are wrong. I have made a little money on USO so far. In this video i will talk about the USO reverse stock split and if I will sell USO anytime soon or not.
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Well Holy smokes This ain’t no joke is okay yesterday I came out with a video on this channel I think a lot of you guys watch this video why I got $11,000 of us $2 us Oh being an oil ETF okay? And people woke up shocked, absolutely shocked to to open their tablets and their computers and their smartphones today to see us so was trading at $17.88.
Currently, the open was at $18.01. And people were shocked by this so like what what why did I go all in uso? Why didn’t I like buy a million call options, stock and things like that. And I was hilarious reading through the comments. Okay. I mean, the comments this morning, were hilarious on that video, I mean, mass amounts of comments from people that a lot of these individuals don’t regularly watch my channel.
You know, they just sometimes watch my channel, let’s put it that way. They’re not like super into the stock market. But a lot of folks, these are these are the two comments like 99% of comments. Were these two comments, who’s waiting for Jeremy to make made 100k video because people literally thought I made like $100,000 today, and then all the other comments where he lost money and told these are both of these are wrong.
Okay, this was literally 99% of the comments on the video and both of them are wrong. No, I did not lose money. And no, I surely didn’t make 100k or anywhere remotely close to that. Okay, I have three objectives with this video here today. Okay, the first one, I’m going to basically tell you if I lost money, or if I made money on this, I’ll calculate all the numbers and show you exactly what we’re looking at.
The second thing we’re gonna talk about is exactly what happened here with us. Oh, and I’m gonna explain to you exactly what happened essentially. Okay. The third thing is, I’m gonna tell you if I’m going to sell us Oh, now or if I’m thinking about buying more, my stance has kind of changed there.
Okay, obviously, this is a big change here in the price, what it looks like. And so I’m explained to you if I’m thinking about selling or anything like that, okay, let me just say that a lot of the people that watch my videos within that, like first eight hours of video coming out a lot of you guys okay, you guys aren’t really confused about what happened here.
Okay, not you guys aren’t but it’s the wider YouTube community that kind of comes in after about eight hours K so smash the thumbs up button. If you’re one of those people that you know you’re here in the first few hours. Let’s put that way I just want to say I love you guys.
Okay, I never get to tell you. We are so caught up in the money all the time. And this stock and Nash stock and what’s going on the market man, I never get to say I appreciate you guys for smashing that thumbs up button. Thank you for what you do. Okay, I got the houses, I got the cars.
I got the stock accounts. None of that matters. All that matters is this point in time is that I beat grim Stephen in the thumbs up challenge. Okay, that guy is so hard to compete with when it comes to thumbs up in every day. I pretty much wake up and I think how can I beat Graham Stefan that thumbs up in their hearts.
So let me just say I appreciate each and every one of you that smash that thumbs up button because that’s what fulfills me nowadays. Okay. That’s what that tells me. Okay. All right, guys. So let’s get into objective one and two, we’ll cover both of these at the same time.
Okay, have I made money? Have I lost money and uso and kind of what happened here today? Okay, so what happened here today with uso is uso did an eight to one split, okay, this is what’s called a reverse split. So sometimes a regular stock split will happen.
And that’s essentially, when a company’s share price is so high, maybe they want to split it. So for instance, if Amazon’s you know, at $2,000 a share, maybe Amazon wants to bring the share price down so people can buy Amazon shares for cheaper. So they might do like a one to 10 split, where essentially every one share you had before.
Now you have 10 shares, but that’s going to be divided up by 10. So now they’re worth $200. So it’s not like you made any money, you lost any money. It’s just the shares are split now. Now you have 10 times more share. But what you so did is what’s called a reverse split, okay, it was an eight to one reverse split.
So which means if you had eight shares before the split, you now have one share, and somebody just learning about stock market. And I said, Oh my gosh, that’s awful, okay, until you realize that your share is now worth a times more. Okay? So it’s just, it’s just a wash sale.
And now after this, what happens, you know, the shares can go up, they can go down, it’s the same thing, obviously, with any stock after that period of time. But in terms of the actual split, you don’t lose any money, you don’t make any money, it all ends up being the exact same.
Okay, so there’s just a lot of confusion around that. And I can understand you like a lot of people don’t, I’ve never went through a reverse player don’t really know about this, too. Well. Okay. So essentially, here’s what happened. Okay, I had 5200 shares of uso I had bought yesterday, my cost basis on those shares is right around $2.13 roughly.
Okay, so let’s go ahead and do some math. So I had 5200 shares before member they did an eight to one split. So now I only have 650 shares, okay, I have 650 shares now might seem bad until you go in and calculate Well, it was worth $2.13 each share times that up by eight so now my share my you know 650 shares are worth $17.04 each okay?
That’s my new real cost basis my new real cost basis on uso is right around $17.04 a share Okay, now here today that you know the shares are trading at $17.88 obviously the shares have traded over 18 but let’s just go off of that what is trading at as of right now recording this video so $17.88 Okay, so $17.88 that’s what the shares are worth.
I have 650 shares, which means essentially I have $11,622 in uso as of right now I can sell that out and right now and literally get $11,622 Okay, now what did I pay for those? I paid around $11,072 or $11,076? I think it was $11,072 what it actually paid for those my cost basis.
Okay, go ahead and do the math on that I’ve made roughly around 550 bucks. So if I sold out right now, I will have profited around 550 bucks. Okay. Not 100k? No, I did not lose money. Who knows? Maybe I will lose money on this trade over time.
But no, I have not lost any money. I’ve made money as of right now if I was to go ahead and take my profit. And no, I certainly did not make $100,000 on this. Okay. So, you know, I understand that’s not as fun to talk about. Some people want to see me lose money.
And some people want to see me make a ton of money. And neither one of those situations I just made a little money as of right now, which by the way, 500 plus dollars selling out for a 500 Plus, you know, plus dollar gain on only 11k investment in less than 24 hours.
Like that’s, that’s pretty freakin good. Okay, I’m gonna be honest, like, that’s pretty freakin good. I mean, if you can do that every day, you don’t need to work another day in your life. Okay, now, that’s much harder to do than then then how it looks is put that way, okay.
Now, if you don’t, if you still don’t understand the reverse stock split, rewind the video, watch that portion over again, or go to like investopedia, they have a really in depth article on reverse stock splits. So maybe if that’s a better way of learning, and it’s not videos for you to understand how you know, the math works behind a reverse stock split, go ahead and check out an article like that.
Okay, so now that we understand basically the reverse stock split, if I’ve made any money as of yet or lost any money and kind of what’s going on there know what you’re talking about? Will I sell us? Oh, am I thinking about maybe buying more us?
Oh, is there anything around my thoughts there changed, okay. Now, I could say, Hey, I made 500 bucks in this or so let’s run let’s go ahead and sell out of this. You know, that’s definitely something I could say. And I can understand if somebody out there bought uso yesterday and they want to sell out and take the profit and run you know, respect to you.
If that’s what you want to do. That’s what you want to do. Okay, for me, nah. Okay. I’m not. I’m not in this to make 500 bucks and run out of this K. That’s not me in the situation. Okay. Obviously, oil prices are up today, probably while uso is up today. Okay, oil prices across the board.
Doesn’t matter what contracts you’re looking at. Everything’s up, okay, all the way from basically, you know, the four month which is June, all the way through, you know, 2021 every single contract is up today. But the fact is, here’s what the situation is with uso uso owns contracts for July 2020 they own August 2020 contract.
They own September 2020 contracts they own October 2020 contracts they own December 2020 contracts and they own June 2021 contracts Okay, and here’s how those splits go okay 30% of us owes money is in July 2020 contracts okay 30% 15% is an August 2020 15% is in September 2020 contracts 15% is in October of 2020 contracts another 15% is in December 2020 contracts and 10% actually is in June 2021 contracts.
And all that information is actually on their website you can go and check it out you can actually see the specific numbers that they bought the contracts and kind of what they’re trading and by the way the contracts are all pretty much in the green now for you so which is good news Okay, that’s the first piece of good news that you’re gonna see USA has had for a long time once again.
I don’t know if I’ve gotten you so right at the bottom or you know, maybe it’s still gonna go down but you know, if I didn’t get it at the bottom I’m gonna get a pretty thing closest put it that way. Okay, so here’s why I don’t want to sell out a uso as of right now.
Look at those prices guys. All your for next month is trading at $19 a barrel. August is trading at 22. September is trading at 24. October is trading at 25. Even if you go out to next summer, the prices are 30 $31 a barrel. These are historic, historically cheap prices. Okay.
Keep in mind during the Great Recession at the lows, a barrel of oil started trading in the 30s Okay. That was during the Great Recession. That was a long dang time ago. Okay. I don’t think this type of pricing is sustainable long term in my personal opinion, maybe it is I just don’t see it.
So in my personal opinion here with you, so I believe it’s going to go up over the next one to two years. Why? Because I believe oil will go up over the next one to two years, I believe oil will likely have a nice Bull Run for the next one to two years.
Maybe it goes up even after that, but I believe the next one to two years are going to be pretty, pretty dang good for oil. Let’s put it that way. I think what all the production cuts, I think with the mass amounts of bankruptcies we’re going to see from a lot of the oil exploration companies out there.
I think the fact that we’re going to start having demand Come on, and eventually over time, it will ramp more and more and demand will go higher and higher, especially if you compare to now when economies are completely shut down. Right. And so in my opinion, oil is going to go up for the next one to two years.
If that happens, you know what else is going to go up? uso is likely going to go up, okay, so I’m expecting to to x my money over the next one to two years. And uso. Okay, that’s what I’m expecting. That’s what I’m going for. That’s why I’m risking this money. I’m not risking this money to make 500 bucks.
I’m not risking this money to make 3% of my money, or 5% or 8% or 10% or even 20% I’m in this one to double my money over the next one to two years. And hey, maybe it doesn’t happen. That’s why I’m taking limited risk in this one. You guys saw when I put it, I put it on an 11k Okay, you know, I think you guys know me pretty well, like 11k is 11k let’s just put it that way.
Okay, I’m taking limited risk with this one. In the video I released yesterday, I said my absolute limit, my absolute limit for investing money into uso would be $44,000 that’s my, that’s my maxed out limit. Okay, now when it comes to like a bigger stock position of mine, it’s all like those are always six figure and up positions.
Okay, so for you know, six figure enough positions in a stock 44k max in uso if I even get to those levels. Obviously, we’re playing on different fields there. And so I want to take limited risk and here’s the situation Hey, maybe it’s possible oil stays at $10 to $30 range for the next two years.
And that just means you know, it’s not a good situation for you so I’ll likely lose money in it that would stink if oil stays in 10 to $30 for the next two years, man that’s that’s gonna that’s gonna be horrible obviously for that position now you can say could benefit the overall economy if oil was in $10 to $30 range for the next two years.
You could say you could benefit a ton of corporations that that you know use fuel products of some kind obviously, you know, they could benefit the airlines and heck even the cruise companies and things like that. But at the end of the day, I think I think it’s very unrealistic.
I think anybody that expects $10 to $30 barrels of oil for the next two years I think you know, just good luck with that. I don’t think that’s gonna happen I do not think that is the way that’s gonna play out so I’ll stay in this one up until I feel like I’ve made enough money in this one is time to cash and I don’t look at it today is like oh my gosh, I got a cash with a $500 profit or something like that.
And this one for the 2x opportunity and if it takes a year to get there if it takes two years to get there I am perfectly fine with that. Okay, I’m perfectly fine with that and if we get there in three months Hey, you know what? Maybe it’ll be time to take some profits okay.
It is what it is obviously with a play like a uso there is a shorter term play this isn’t like you know, one of these stocks I buy out there you know, that I that I hold for years and years. This is this is an oil ETF this is this is a short term play, and I’ll sell it when.
I’ve made enough money and today not enough money is put that way guys, so hope you enjoyed today’s video as always help you learn a little bit about reverse stock splits, how those work, make sure you smash the thumbs up button and you know, share this out with somebody if they’re confused about how this works. All right. Thank you for watching and have a great day.