ALL OF THE BELOW IS FOR JULY '11 (20 contracts)
CONSERVATIVE BEAR PUT SPREAD:
If the stock falls to 38 or below, you're set to a 7k gain... The breakeven level is 41.51... and if the maximum loss is 8,980 at 46$... Considering the last time this ETF hit 46$ was Nov 2008, I feel it's very unlikely. But wtf do I know...
AGGRESSIVE BEAR PUT SPREAD:
This is a much more aggressive approach... If you would bet your left nut that the stock will drop... I think this spread is good for you :D... The spread breakeven level is 36.61... Max gain is 9.2k at 32$ or below... and maximum loss is 2,700 at 38$ or above..
While everything is possible I doubt that USO will see $32 with the current mess in Libya and the middle-east. Also demand for oil is quite high in Asia and the rest of the world. If at any time we see that Saudi Arabia was or is unable to cover extra demand from their reserves oil prices will skyrocket.