I am confused. I have long term USO (600+ days) options and currently they are trading 20 times lower than the same options that expiring 20 days from now. Should't the long term one have time value + intrinsic value? Both ITM of course. What am I missing here? Are they going bankrupt soon or what?
USO underwent a 1-for-8 reverse stock split. Because of that, each USO Common Share was converted into the right to receive 0.125 (New) United States Oil Fund, LP Common Shares plus cash in lieu of fractional USO shares.
All existing option contracts were also adjusted to cover 12 (new) USO shares and cash in lieu of 0.5 fractional USO shares. The new root symbol for these adjusted USO contracts is now USO1.
My guess is that you bought your calls before the split and therefore you now own adjusted contracts.
Option contracts created since the reverse split are for 100 shares and therefore they are priced quite differently.