$USO

Oil vol is too cheap

With VIX grabbing all the headlines for lower volatility at the end of the year it is easier to forget about what help drive volatility at the beginning of the year, namely oil or the proxy USO.  Oil IV in the Jan cycle is around 27% which is a level not seen since USO had a 20 handle and is now trading 11.5.  It's as if the market decided oil can"t move .50 a day for a barrel.  That sounds too cheap given some of the recent movement.

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