RUT Archives - CBOE Blogs

  • Market News | Trader Talk | Strategy | Trade Ideas | Nov 9, 2015, 4:00 PM

    Eye Catching RUT Put Spread from Today

    Eye Catching RUT Put Spread from Today

    Surveying the market as the sellers took the Russell 2000 Index lower today, a large trade stood out. There was a Vertical Put spread in RUT traded approximately 12,000 contracts with the trader buying the Nov. 13th 1020 Puts for 0.12 and selling the RUT Nov. 13th 1000 Puts at 0.04 for a net .08 debit.  This was done in a few lots with the underlying Russell 2000 Index trading between 1180 – 1182.55. Noting that the trader was buying the higher strike put and recognizing this position[...]

  • Market News | Education | Nov 9, 2015, 11:12 AM

    Pop Quiz: Which Russell 2000 Index is Outperforming in 2015?

    Pop Quiz: Which Russell 2000 Index is Outperforming in 2015?

    Russell 2000 Index (RUT) or CBOE Russell 2000® BuyWrite Index (BXR) Before I answer my own question let’s take a moment and refresh our memory on what is the CBOE Russell 2000 BuyWrite Index BXR℠. The CBOE Russell 2000 BuyWrite Index is an investment strategy benchmark index designed to track the performance of a hypothetical at-the-money buy-write strategy on the Russell 2000 Index.  It’s intended to measure the total rate of return consisting of a “long”[...]

  • Market News | VIX | Trader Talk | Education | Strategy | Nov 8, 2015, 8:13 AM

    The Week in Russell 2000 Trading - 11/2 - 11/6

    The Week in Russell 2000 Trading - 11/2 - 11/6

    The first thing that popped in my mind when I created the first chart in this blog was the story “The Little Engine that Could”.  This was a pre-Thomas the Tank Engine story of a little locomotive that achieves a great feat while telling himself “I think I can” repeatedly.  My mental analogy relates to the Russell 2000 (RUT) line below which pushed higher by over 3% last week closing the 2015 YTD gap with the Russell 1000 and also moved very close to positive territory[...]

  • Market News | VIX | Trader Talk | Trade Ideas | Nov 1, 2015, 3:30 PM

    The Week in Russell 2000 Trading - 10/26 - 10/30

    The Week in Russell 2000 Trading - 10/26 - 10/30

    I’m still playing some catch up from school work and travel which caused me to take my eye off the ball with respect to the markets.  It happens and when it does I’m always surprised by something that occurred while my mind and body were elsewhere.   The big surprise for me this time around was the disconnection between small and large cap stocks that happened over the past couple of weeks. Over the last two weeks of October the Russell 2000 (RUT) was basically unchanged[...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Oct 18, 2015, 12:36 PM

    The Week in Russell 2000 Trading - 10/12 - 10/16

    The Week in Russell 2000 Trading - 10/12 - 10/16

    Large cap stocks gained and small cap stocks were lower last week with the Russell 1000 (RUI) moving up by 0.77% while the Russell 2000 (RUT) dropped 0.26%.  For the year RUI is down 1.25% and RUT has given up 3.52%. The implied volatility differential finished the week with the CBOE Russell 2000 Volatility Index (RVX) at about a 20% premium to VIX which is pretty close to the average level for this year.  For the moment the risk perception for small cap stocks is at levels[...]

  • Market News | VIX | Trader Talk | Futures | Oct 11, 2015, 8:30 AM

    The Week in Russell 2000 - 10/5 - 10/9

    The Week in Russell 2000 - 10/5 - 10/9

    The 4.6% gain for the Russell 2000 (RUT) was the biggest one week gain since late October 2014 when (I think) the market was rebounding from an ebola scare.  Large cap stocks participated in the rally with the Russell 1000 (RUI) rising 3.26%, but this lagged the rebound in small cap stocks.  Despite the ‘win’ for RUT, the Russell 2000 still lags the Russell 1000 by over 1% for 2015 (-3.27 vs. -2.00%). If this past week were homecoming at Volatility High School the[...]

  • Market News | Trader Talk | Education | Trade Ideas | Oct 4, 2015, 7:30 AM

    The Week in Russell 2000 Trading - 9/28 - 10/2

    The Week in Russell 2000 Trading - 9/28 - 10/2

    For the second week in a row large cap stocks outperformed small cap stocks by about 1.5%.  The big difference this week was that the Russell 1000 (RUI) was higher while the Russell 2000 (RUT) lost value.  The previous week RUI lost less than RUT, but both had pretty lousy weeks.  For the year RUI is now down a little more than 5% while RUT has lost just over 7.5%. The CBOE Russell 2000 Volatility (RVX) index finished the week at a little over a 10% premium to VIX.  This lack[...]

  • VIX | Trader Talk | Education | Futures | Trade Ideas | Sep 27, 2015, 2:20 PM

    New White Paper Discusses Volatility as a Small Cap Portfolio Hedge

    New White Paper Discusses Volatility as a Small Cap Portfolio Hedge

    A new white paper from our partners over at Russell Indexes Research discusses the merits of using futures on the CBOE Russell 2000 Volatility Index (RVX) to hedge small cap risk.  In the paper “RVX futures as a hedge for small cap-specific risk” Barry Feldman covers volatility products that are currently available to hedge downside risk in equity portfolios and then goes on to compare using VIX futures and RVX futures to hedge a small cap focused portfolio. Feldman uses the market[...]

  • Market News | VIX | Trader Talk | Futures | Trade Ideas | Sep 27, 2015, 7:01 AM

    The Week in Russell 2000 Trading - 9/21 - 9/25

    The Week in Russell 2000 Trading - 9/21 - 9/25

    For the previous couple of weeks small cap stocks were the place to be.  That fad came to an abrupt end last week as the Russell 2000 (RUT) dropped almost 3.5%.  Over the same period of time the large cap focused Russell 1000 (RUI) was lower by 1.57%.  In addition to trailing RUI for the week, RUT is now 6.8% lower for 2015 while the RUI is down 5.92%. For a while it appeared the CBOE Russell 2000 Volatility Index (RVX) was going to return to ‘normal’ levels when compared[...]

  • Market News | VIX | Sep 20, 2015, 7:00 AM

    The Week in Russell 2000 Trading - 9/14 - 9/18

    The Week in Russell 2000 Trading - 9/14 - 9/18

    Once the dust had settled last week, large cap stocks dropped slightly with the Russell 1000 losing 0.10%.  Small cap stocks were the place to be, at least on a week over week basis, as the Russell 2000 rose 0.48%.  It was a frantic trading week due to the first FOMC meeting in a very long time that had some debate and uncertainty as to what the ‘Fed was going to do’.  They did nothing and small cap stocks liked it more than large cap stocks. The relationship between the[...]

  • VIX | Trader Talk | Education | Trade Ideas | Sep 13, 2015, 2:06 PM

    The Week in Russell 2000 Trading - 9/8 - 9/11

    The Week in Russell 2000 Trading - 9/8 - 9/11

    Small and large cap stocks moved higher in sync last week with both the Russell 1000 (RUI) and Russell 2000 (RUT) gaining about 2%.  Both are still lower for the year with RUI down 4.32% and RUT down 3.89%. On the volatility front VIX finished the week at about a 5% discount to the CBOE Russell 2000 Volatility Index (RVX).  Historically RVX is usually at about a 20% premium to VIX, however, in times of global crisis or higher levels of volatility the two tend to converge.  The recent[...]

  • The Week in Russell 2000 Trading - 8/31 - 9/4

    The Week in Russell 2000 Trading - 8/31 - 9/4

    The Russell 1000 (RUI) was down 3.31% last week and the Russell 2000 (RUT) lost 2.3%.  This outperformance (I know it doesn’t feel like outperformance) of small caps leads me to ponder the true concerns of market participants that actually put money to work.  The press continues to focus on the Fed’s next move, which will be known in just under two weeks on September 17th.  However, small cap stocks, as a group, are more exposed to the domestic economy than large cap stocks. [...]

  • Market News | VIX | Trader Talk | Education | Sep 3, 2015, 3:17 PM

    Block Trade - RUT Bull Put Spread That's More Like Just Shorting a Put

    Block Trade - RUT Bull Put Spread That's More Like Just Shorting a Put

    Before getting to the trade, indulge me for a second while I show the value of selling puts in a broad based market index... The CBOE S&P 500 PutWrite Index (PUT) is an excellent depiction of the benefits of selling puts.  The chart below shows the performance of PUT versus the total return for the S&P 500 from January 1990 through the end of August 2015.  Both returns are displayed assuming $100 was invested at the beginning of 1990.  Note over time PUT outperforms[...]

  • Market News | VIX | Trader Talk | Futures | Aug 30, 2015, 9:40 AM

    The Week in Russell 2000 Trading - 8/24 - 8/28

    The Week in Russell 2000 Trading - 8/24 - 8/28

    Once a month I leave CBOE for a couple of days and turn into a student attending a residency at Oklahoma State.  I do my very best to leave the markets behind and focus on my studies.  I did a pretty good job of tuning out what was going on toward the end of the week.  This resulted in me being surprised that the Russell 1000 (RUI) gained almost 1% on a week over week basis with the Russell 2000 rising just over a half of a percent.  Both are lower on the year, with large[...]

  • Market News | Futures | Aug 24, 2015, 8:27 AM

    Record Volume Day for CBOE and SPX Options, as VIX Index Has Its Biggest One-Week Jump

    Record Volume Day for CBOE and SPX Options, as VIX Index Has Its Biggest One-Week Jump

    This past week the CBOE Volatility Index® (VIX®) rose 118.5%, its largest move ever (in percentage terms) in one calendar week. On Friday CBOE®, C2 Exchange and the CBOE’s S&P 500® (SPX) options all experienced record volume days, with estimated volume of 11 million options contracts traded on CBOE.  A news report at Marketwatch noted –“Across the globe, investors dumped anything with a whiff of “risk” as an economic slowdown in China accelerates,[...]