Today’s What’s Trading focused on a Bull Put Spread using Russell 2000 (RUT) quarter end options expiring on March 31st.



For 2017, as of mid-morning today, the S&P 500 (SPX) is up about 3% more than RUT, which is a reversal of year end price action that saw small cap stocks as represented by RUT out performance the SPX by over 10% from election day to December 31st

Note the elevated level of RUT implied volatility of RUT options as represented by the CBOE Russell 2000 Volatility Index when compared the VIX.  Most of 2017 has seen elevated RUT premiums when compared to similar SPX option contracts and today’s trade was likely taking advantage of high RUT IV.