USOI’s Monthly Income Trade-Off Costs Investors 50 Percentage Points of Oil’s Rally
USOI investors traded away a 50-percentage-point gap in returns compared to a direct oil position through early April 2026. The United States Oil Fund (USO) gained 93% year-to-date in that period, while USOI gained nearly 30%. This divergence is the result of a 6% monthly cap on price appreciation. USOI holds a notional long position in USO and sells monthly call options roughly 6% out-of-the-money against that position. When oil prices spike beyond that cap, the sold calls are exercised and participation in the rally stops.
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