“The US Oil Fund (NYSE:USO) has been in lockstep with the broader maker, but one trader positioning for downside in crude. (NYSE:USO) is up 3.38 percent to $33 in morning trading, compared with a 2,73 percent increase in the S&P 500. The fund is near the low end of its 52-week range, with support at $30.93 set on May 25, less than two months after it peaked at $42.19. The fund has a 94 percent correlation with the S&P 500 over the last 30 days,” Chris McKhann Reports From Option Monster.

McKhann goes on to say, “The April 25 puts lead the volume list today. A trader bought 5,000 contracts for $1.03 against open interest of 1,763. We do not see any corresponding volume in (NYSE:USO) shares, but it is always possible that it was a hedge on an existing long position. About an hour later, another investor stepped in to sell 5,000 of the puts for $0.94. That being said, these puts are quite far out-of-the-money, and the (NYSE:USO) only closed below $25 for a total of seven trading days at the worst of the financial crisis. So this looks the purchase was an outright bearish bet that oil could revisit those lows.”

Here are some more details on the U.S. Oil ETF (NYSE:USO) including a snapshot of the options activity discussed.

United States Oil ETF (NYSE:USO) – Visit Our (USO) Category: HERE

The investment seeks to reflect the performance, less expenses, of the spot price of West Texas Intermediate (WTI) light, sweet crude oil. The fund will invest in futures contracts for WTI light, sweet crude oil, other types of crude oil, heating oil, gasoline, natural gas and other petroleum based-fuels that are traded on exchanges. It may also invest in other oil interests such as cash-settled options on oil futures contracts, forward contracts for oil, and OTC transactions that are based on the price of oil.

Call Options

Expire at close Thursday, September 2, 2010

Strike Symbol Last Chg Bid Ask Vol Open Int 24.00 USO100918C00024000 9.20 0.00 8.60 9.20 14 14 26.00 USO100918C00026000 6.30 0.00 6.80 7.15 20 1 27.00 USO100918C00027000 6.08 0.00 6.05 6.15 2 11 28.00 USO100918C00028000 3.92 0.00 5.10 5.15 32 76 29.00 USO100903C00029000 3.35 0.40 3.75 4.10 2 12 29.00 USO100918C00029000 4.10 0.81 4.10 4.20 37 395 30.00 USO100903C00030000 2.69 0.00 3.05 3.15 0 60 30.00 USO100918C00030000 3.00 0.84 3.15 3.25 100 921 31.00 USO100903C00031000 1.63 0.59 2.09 2.13 1,049 1,008 31.00 USO100918C00031000 2.20 0.77 2.26 2.29 574 1,024 32.00 USO100903C00032000 0.96 0.58 1.17 1.20 329 750 32.00 USO100918C00032000 1.36 0.52 1.49 1.50 1,347 5,097 33.00 USO100903C00033000 0.38 0.29 0.40 0.42 447 2,281 33.00 USO100918C00033000 0.84 0.41 0.87 0.88 5,162 10,852 34.00 USO100903C00034000 0.05 0.02 0.06 0.07 127 1,264 34.00 USO100918C00034000 0.43 0.21 0.43 0.44 1,493 14,713 35.00 USO100903C00035000 0.02 0.00 0.01 0.02 24 210 35.00 USO100918C00035000 0.20 0.08 0.20 0.21 1,938 16,963 36.00 USO100903C00036000 0.01 0.00 N/A 0.01 22 62 36.00 USO100918C00036000 0.10 0.03 0.09 0.10 303 12,707 37.00 USO100918C00037000 0.06 0.01 0.05 0.06 394 9,991 38.00 USO100918C00038000 0.04 0.01 0.03 0.04 1 11,475 39.00 USO100918C00039000 0.03 0.01 0.02 0.04 70 3,710 40.00 USO100918C00040000 0.03 0.00 0.02 0.03 20 6,264 41.00 USO100918C00041000 0.03 0.00 0.01 0.02 25 237 42.00 USO100918C00042000 0.02 0.00 0.01 0.02 31 795 43.00 USO100918C00043000 0.02 0.00 0.01 0.02 30 332 44.00 USO100918C00044000 0.01 0.00 N/A 0.02 18 2,129 45.00 USO100918C00045000 0.01 0.00 N/A 0.01 30 4,535 46.00 USO100918C00046000 0.01 0.00 N/A 0.01 2 2,670 47.00 USO100918C00047000 0.01 0.00 N/A 0.01 3 3 48.00 USO100918C00048000 0.03 0.00 N/A 0.01 75 196 49.00 USO100918C00049000 0.03 0.00 N/A 0.01 28 130 50.00 USO100918C00050000 0.03 0.00 N/A 0.01 200 2,368

Put Options

Expire at close Thursday, September 2, 2010

Strike Symbol Last Chg Bid Ask Vol Open Int 22.50 USO100918P00022500 0.03 0.00 N/A 0.01 2 104 24.00 USO100918P00024000 0.01 0.00 N/A 0.01 88 226 25.00 USO100918P00025000 0.01 0.00 N/A 0.01 5 605 26.00 USO100918P00026000 0.01 0.00 N/A 0.01 61 497 27.00 USO100918P00027000 0.01 0.01 0.01 0.02 12 723 28.00 USO100918P00028000 0.02 0.03 0.02 0.03 172 3,808 29.00 USO100903P00029000 0.01 0.00 N/A 0.01 1 2 29.00 USO100918P00029000 0.05 0.06 0.04 0.05 15 3,585 30.00 USO100903P00030000 0.01 0.03 N/A 0.01 10 191 30.00 USO100918P00030000 0.10 0.14 0.08 0.10 762 15,238 31.00 USO100903P00031000 0.02 0.12 0.02 0.03 5 812 31.00 USO100918P00031000 0.21 0.28 0.19 0.20 1,632 10,703 32.00 USO100903P00032000 0.10 0.38 0.08 0.09 319 1,490 32.00 USO100918P00032000 0.43 0.47 0.40 0.41 918 11,054 33.00 USO100903P00033000 0.35 0.83 0.30 0.32 1,080 1,886 33.00 USO100918P00033000 0.82 0.71 0.77 0.78 877 8,797 34.00 USO100903P00034000 1.08 0.41 0.96 1.01 600 84 34.00 USO100918P00034000 1.36 0.99 1.35 1.36 176 8,579 35.00 USO100903P00035000 2.12 0.15 1.90 1.96 10 25 35.00 USO100918P00035000 2.15 1.05 2.09 2.14 86 2,482 36.00 USO100918P00036000 3.01 1.09 2.98 3.05 123 4,840 37.00 USO100918P00037000 4.00 0.05 3.95 4.05 43 2,710 38.00 USO100918P00038000 5.21 0.49 4.90 5.00 1 289 39.00 USO100918P00039000 5.78 0.00 5.90 6.25 6 229 40.00 USO100918P00040000 6.95 0.00 6.90 7.00 3 168 41.00 USO100918P00041000 7.85 0.00 7.90 8.15 20 21 42.00 USO100918P00042000 8.85 0.00 8.85 9.20 1 17 43.00 USO100918P00043000 10.10 0.00 9.85 10.20 1 1 45.00 USO100918P00045000 11.40 0.00 11.80 12.65 20 51 50.00 USO100918P00050000 16.75 0.00 16.80 17.60 10 10

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