The out performance of small cap stocks in the form of the Russell 2000 (RUT) relative to large cap stocks which is best represented with the Russell 1000 (RUI) has been nothing short of astonishing.  Last week RUT was up over 6% while RUI gained just over 3%.  For the year, RUT is up over 22% and RUI is up almost 11%.

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Breaking down the performance difference a little more starts with a look at relative performance since election day.  RUT is up 16.1% and RUI is up 5.9%.  Almost all of the out performance by RUT has come since November 8th.

rut-v-rui

Finally, it seems like a distant memory, but RUT began the year terribly under pressure.  Since the low of 2016 RUT is up over 45%.  To all those who picked the bottom on February 11th!

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On Monday RUT started out the week up slightly.  About 30 minutes into the trading day, with RUT at 1334.75, there was a buyer of the RUT Dec 9th 1360 Calls who also sold the RUT Dec 9th 1370 Calls.  They paid 1.61 for the 1360 Calls and sold the 1370 Calls at 0.56 for a net cost of 1.05 and a payout on Friday that appears below.

rut-po

We all know that the market rallied tremendously this past week and RUT was over 50 points higher than where it was when this bull call spread was implemented.  If held to expiration the trade that cost 1.05 resulted in a profit of 8.95.