Notices
Read about these for a smoother and safer trading experience.
Please find below the information we received from our US broker.
With the ongoing extreme volatility in the oil markets, resulting in the historic negative value of the May futures contracts of West Texas Intermediate (WTI), the probability exists that the coming weeks could see drastic changes in the trading in the oil ETFs. One in particular is USO, which is by far the most actively traded oil ETF whose price is closely tied to the short term price of oil.
While not a leveraged ETF, the volatility of its trading has led to the overall risk profile for the security elevated to all-time high levels. This could lead to the disruption in the clearing and settlement of the security which could have a drastic impact for all clients that hold the security.
As a side note: with the upcoming reverse split of USO on 28 April 2020, clients should review the effects of a closely related security, UCO, that also conducted a reverse split this week and dropped in value approx. 60% the following day. Historically, reverse stock splits are rarely a positive event in the short-term.
Please find enclosed an informational document concerning USO which should be viewed only as that, an informational document. If you have any queries, please do not hesitate to contact your Trading Representative.
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