Should I buy USOI stock in 2025? Insights for South Africa

What is USOI?

How much is the USOI stock?

The price of USOI stock is rising this week. Trading at $54.50 USD, USOI is up 0.24% in the past 24 hours and has gained 0.52% over the last week. The stock’s market capitalization stands at $290.8 million, with an average three-month volume of 45,851 shares.

While the P/E ratio is not available for this ETN, USOI offers an impressive dividend yield of 25.43% and displays a relatively moderate beta of 0.78, indicating some resilience against wider market swings.

For South African investors seeking high income and oil market exposure, USOI’s strong yield is attractive—though its recent volatility suggests closely watching the market remains essential.

Our full analysis on the USOI stock

Having thoroughly reviewed the latest financials, pricing dynamics, and sector signals for USOI – the UBS ETRACS Crude Oil Shares Covered Call ETN – as well as incorporating multi-source analyses through our proprietary modeling, we stand at an intriguing inflection point. Over the past three years, USOI has demonstrated the resilience and adaptive potential of covered-call strategies in the oil commodities arena, while offering a distinctive risk/return profile during turbulent periods. So, why might USOI stock once again become a strategic entry point into the commodities income sector in 2025?

Recent performance and market context

USOI’s current market price stands at $54.50 (as of 30 May 2025), with a modest intraday uptick of 0.24% and a weekly advance of 0.52%. While the note has experienced a 6-month drawdown of -14.74% and a 1-year decline of -25.50%, these cyclical corrections tell only part of the story. Instead, they invite a closer look at the inflection zone in which USOI now trades.

• Strategic Coupon Distribution: On 6 February 2025, UBS announced a robust coupon payment of $1.7502 per ETN, with a yield temporarily spiking to 27.3%—a level that dramatically outpaces most traditional yield instruments in both South African and global markets.
• Commodities Macro Tailwind: Oil prices have shown resilience following periods of volatility, and the underlying WTI crude market remains supported by OPEC+ output management, realignment of global energy flows, and ongoing geopolitical tensions. For South African investors, oil’s role as a global inflation and growth bellwether lends importance to instruments tracking the commodity.
• Covered call stability: The USOI’s design provides income with reduced volatility compared to naked oil futures, making it particularly apt for investors seeking regular yield amidst fluctuating risk appetite.

Given this context, USOI seems poised to capitalize on a confluence of favorable sector dynamics, especially as global demand for energy remains robust and volatility premiums for options remain high, bolstering distributions.

Technical analysis

• Relative Strength Index (RSI): With 14-day RSI at 49 (neutral), a 20-day reading at 46, and 30-day at 45, the ETN is neither overbought nor oversold. This equilibrium suggests price stabilization at new support levels—a potential platform for renewed upward moves.
• MACD: The short-term MACD (15 periods) is marginally negative at -0.07, indicative of a consolidation phase but showing signs that bearish momentum is waning. The longer-term MACD (-5.35 over 100 periods) aligns with a medium-term mean-reversion scenario.
• Moving averages: The 20-day simple moving average at $53.90 is nearly aligned with the current price, pointing to recent price normalization. Immediate technical supports are established at $54.06 and $53.75—areas where prior buying interest has materialized—while resistances at $54.72 and $55.07 represent breakout triggers.
• Trading range: The 52-week range ($50.05-$75.99) highlights a significant downside cushion, with the lower band having been tested and held. This infers that USOI is now trading in the lower quartile of its historical band, frequently a zone favored by value- and income-seeking buyers.

In summary, short-term technical signals suggest a basing structure, with probable positive momentum should the price decisively clear initial resistance. The neutral RSI and compressed MACD-differential further support the case for an oncoming reversal.

Fundamental analysis

• Revenue generation: The ETN’s covered-call approach consistently monetizes volatility in the oil markets, supplying high-yield income via monthly options premiums. Recent coupons have approached double-digit yields on an annualized basis, far exceeding prevailing rates in traditional income segments. This regular yield generation remains an enduring attraction.
• Attractive valuation: With no conventional P/E or PEG ratio applicable (as a commodities ETN), fair value is better assessed via distributable yield and NAV. The forward-looking yield of 25.43% (or 9.46% as per alternative calculation methodologies) is both compelling and competitive, especially in the context of elevated global volatility and inflation hedging demand.
• Strategic strengths:
• 100% exposure to WTI crude, a cornerstone commodity.
• Income enhancement and volatility dampening via the covered-call overlay—an advantage during uncertain oil markets.
• Structural advantages for South African investors seeking dollar-denominated, high-yield, and sector-diversified exposure.
• A sound brand in UBS, providing institutional credibility and global reach.

While category-relative returns have lagged in 2024 (-16.97% YTD versus the commodities peer group at +1.73%), the three- and five-year comparatives reveal enhanced performance (+13.25% over 5Y, surpassing +8.59% for its category). This longer-term outperformance, paired with rebounding fundamentals, justifies renewed interest at today’s valuations.

Volume and liquidity

• Consistent trading activity: Average daily turnover of 45,851 units over the trailing three months signals ongoing interest from both institutional participants and sophisticated retail investors. Such liquidity not only facilitates efficient entry and exit, but also indicates market confidence in the vehicle.
• Manageable float: With 5.4 million notes outstanding, the ETN’s float is ample for robust price discovery but contained enough to maintain potential for dynamic repricing, particularly ahead of major option roll dates or distribution announcements.
• Low beta: Its beta of 0.78 (5Y) denotes moderately lower volatility than the broader oil market, supporting the argument that the covered-call feature delivers tangible volatility management benefits.

Collectively, these factors reinforce USOI’s appeal to traders and portfolio builders seeking a balance of yield and tradability.

Catalysts and positive outlook

• Sustained elevated option premiums: Persistently high volatility (recently at 24.67% over 20 days, ranking 7th among 34 category peers) ensures that call option premiums, and thus distributed yields, remain attractive. Elevated implied volatility environments often precede robust coupon declarations.
• Favourable global supply/demand dynamics: Ongoing geopolitical disruptions, OPEC+ decisions, and North American supply uncertainty all support price floors for WTI crude, which in turn favour instruments with direct oil exposure.
• Innovative income strategies in commodities: As global investors expand beyond traditional equities and bonds, yield-enhanced products like USOI are well-positioned to benefit from broader adoption, especially among yield-seeking institutional and high-net-worth investors in South Africa and globally.
• Potential for reversionary upside: Should oil prices recover or stabilize further, the underlying value of call-sold positions may leap, adding to both mark-to-market and distributed returns.
• Structural defensive features: The product’s partial volatility dampening and income focus makes it especially relevant during periods of rising interest rates or high inflation, conditions familiar to many emerging market investors.

The intersection of these drivers places USOI at the crossroads of income, commodities exposure, and volatility management—a rare combination that is increasingly in demand.

Investment strategies

• Short-term: After a protracted slide and stabilization above technical support, momentum traders might find ideal positioning near current levels ($54-$55), anticipating a technical rebound and/or enhancement in monthly distribution announcements.
• Medium-term: Investors seeking income plus capital appreciation potential could accumulate USOI as oil price volatility persists and distributions remain robust. The timing ahead of major macro catalysts (such as OPEC meetings or US inventory reports) could bolster performance.
• Long-term: For income-focused portfolios, particularly those seeking dollar-hedged exposure and commodities diversification, USOI’s potent combination of high coupons, brand-recognition (UBS backing), and systematic covered-call overlays represents a disciplined, repeatable source of return. Its price, now trading in the historical lower quartile of its 52-week range, seems to represent an excellent opportunity for gradual accumulation.

Aggressive accumulation near $54, with stops just below the $53.75 support (technical floor), and scaling positions into any pullbacks, could be a disciplined approach. Equally, anticipating distributions and aligning purchases a few days before the ex-dividend date may enhance yield capture for active strategies.

Is it the right time to buy USOI?

In summary, USOI presents a compelling confluence of factors appealing to both South African and wider global investors: attractive entry price near historical supports, a unique yield-focused structure capitalizing on oil market volatility, solid liquidity underpinned by active trading, and credible backing by one of the world’s leading financial institutions. As global shifts in energy, geopolitics, and inflation redefine investor priorities, USOI stands out as a differentiated, income-oriented enhancer with dynamic upside potential.

The fundamentals justify renewed interest, with high distribution levels offering a buffer during ongoing adjustment phases, and technical signals pointing toward a probable bullish reversal. For those seeking diversified commodities exposure paired with substantial yield—particularly in the context of portfolio income enhancement—USOI stock may be entering a new bullish phase. Its blend of structural resilience and income generation suggests that now could be an ideal moment to seriously consider USOI as a strategic position in a forward-looking, globally diversified portfolio.

As the balance of macroeconomic and technical indicators turns more favorable, USOI appears primed for those investors seeking robust income and leveraged exposure to a critical global commodity—a rare configuration in today’s market, and an opportunity worth evaluating with genuine conviction.

How to buy USOI stock in South Africa?

Buying USOI stock online is simpler and more secure than ever, thanks to regulated brokers that cater to South African investors. Whether you want to become a direct shareholder (spot buying) or trade using Contracts for Difference (CFDs), established platforms offer user-friendly interfaces and strong investor protections. Spot buying gives you full ownership, while CFDs allow flexible trading—including leverage—without actual share ownership. Both methods are available on leading platforms compliant with FSCA or top international authorities. To help choose the broker best suited to your needs, see our detailed comparison further down the page.

Cash buying

With cash buying, you purchase actual USOI shares on NASDAQ and become a direct shareholder. This approach is best for long-term investors who want direct exposure and any dividend distributions the ETN might pay. Typically, South African-friendly brokers charge a fixed commission per trade—often ranging from R75 to R200 (about $4–$11), depending on the broker and currency conversion fees.

Example

If the USOI share price is $54.50 and you invest $1,000 (roughly R18,000 at current exchange rates), you can buy about 18 shares ($1,000 ÷ $54.50 ≈ 18), including a brokerage fee of around $5.

Gain scenario

If the share price rises by 10%, your 18 shares are now worth a total of $1,100.
Result: +$100 gross gain, meaning +10% return on your original investment.

Trading via CFD

CFD (Contract for Difference) trading allows you to speculate on USOI’s price movements without owning the actual ETN. CFDs are popular for their flexibility and the ability to use leverage, but come with specific fees: a spread (the difference between buy and sell price) and overnight financing costs if you keep your position open beyond one day.

Example

With a $1,000 (about R18,000) account and 5x leverage, you open a USOI CFD position with effective market exposure of $5,000.

Gain scenario

If USOI rises by 8%, your leveraged position earns 8% × 5 = 40%.
Result: +$400 gain on your $1,000 staked (excluding spreads and overnight fees).

Final advice

Before buying USOI shares or trading via CFDs, it’s essential to compare brokers’ fees, spreads, currency conversion rates, and trading conditions. Your best choice depends on your investment goals: spot buying is ideal for long-term wealth building, while CFDs suit active traders seeking flexibility and magnified gains (with higher risk). To help you decide, we offer a comprehensive broker comparison further down the page—empowering you to invest with confidence.

Our 7 tips for buying USOI stock

The latest news about USOI

USOI posts a positive weekly price performance with a 0.52% gain, providing a constructive technical signal. Over the last seven days, USOI's share price closed at $54.50 USD, reflecting an encouraging short-term recovery despite a challenging year-to-date context. This resilience is particularly relevant as the ETN sits firmly above its closest support of $54.06 and hovers near its first resistance at $54.72, indicating balanced upward momentum. For South African investors, this upward trend may offer a compelling opportunity for diversification within portfolios sensitive to global commodity cycles, especially considering domestic equities' correlation with resources and the rand's behavior against the dollar.

USOI maintains an exceptionally high current dividend yield, supporting income-focused investment strategies popular in ZA. The ETN currently offers a yield of 25.43%, positioning it as one of the most attractive instruments globally for income seekers. With fixed income and dividend-paying products being a significant part of South African investors' portfolios—particularly in a climate of local bond yield volatility and inflation uncertainty—USOI's high, frequent cash flows stand out, especially since they derive from the covered call strategy, which is less accessible in local markets. This makes USOI a potentially useful vehicle for those seeking regular USD-based income as a hedge or enhancement to their domestic returns.

The covered call methodology continues to deliver consistent premium income, reducing portfolio volatility. USOI’s strategy of selling monthly covered calls on WTI crude exposure via the United States Oil Fund underpins its high-yield profile and can serve as a volatility dampener. Amid recent global oil market fluctuations, this defensive approach has helped to mitigate drawdowns compared to pure spot oil exposure. For institutional and retail investors in South Africa, especially those not directly participating in derivatives markets, USOI provides institutional-quality access to a sophisticated strategy that smooths returns and generates reliable premium income, enhancing diversification benefits in local portfolios.

Liquidity remains robust, with a three-month average daily trading volume of over 45,000 shares, enabling efficient access for international participants. With a relatively high trading volume and more than 5.4 million shares outstanding, USOI facilitates ease of entry and exit. This is vital for South African investors accessing offshore exposures via local brokers or through platforms that require solid underlying liquidity for price transparency and risk management. Compared to many less-liquid commodity ETNs, USOI’s volume profile supports tactical allocation shifts without undue market impact, which aligns with the needs of professional portfolio managers and sophisticated retail clients in ZA.

UBS AG’s strong global credit rating bolsters USOI’s structural security, addressing a key concern for South African holders of international ETNs. USOI remains a senior, unsecured debt obligation of UBS AG, one of the world’s largest and most reputable banking institutions. In the context of persistent concerns among South African investors about the counterparty and issuer risk—especially after recent global financial sector volatility—the financial health and regulatory oversight of UBS provide reassurance. For local investors, this structural strength is a crucial consideration when choosing between ETNs, ETFS, or direct offshore commodity allocation, making USOI an appealing choice within the universe of USD-income-producing vehicles.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.