Large cap dominance continues as the Russell 1000 (RUI) gained 0.77% last week and the Russell 2000 (RUT) was down 0.38%.  For the year RUI is now outpacing by over 3%.

RUT RUI

Small cap risk remains high relative to large cap risk as the CBOE Russell 2000 (RVX) premium to VIX remains are elevated levels. 

RVX VIX

First thing Friday, with RUT under a bit of pressure down about 10 points around 1383 one trader came in with a bull put spread that has a ton of room for error.  They sold the RUT Apr 1220 Puts for 5.23 and purchased the RUT Apr 1210 Puts for 4.77 and a credit of 0.46. 

RUT PO

Note the maximum profit for this trade is minimal relative to the worst-case scenario of a loss of 9.54.  However, the Russell 2000 has to lose over 12.5% from where it was trading when this spread was executed and as long as RUT is not down more than 11.8% the trade will return the credit received.