Small cap stocks in the form of the Russell 2000 (RUT) lost 3 basis points last week which I am going to call a flat week.  Large caps represented by the Russell 1000 (RUI) was up .77% widening the lead for 2017 to 3.71%. 

RUT RUI

With the under performance of RUT last week came an increase in the CBOE Russell 2000 Volatility Index (RVX) premium to VIX which topped 50% to end the week.

RVX VIX Ratio

Although small caps have been lagging, at least one trader has expectations for RUT to push higher.  With RUT at 1389 there was a buyer of RUT Apr 1440 Calls at 11.23 who then sold RUT Apr 1460 Calls for 6.58 resulting in a net cost of 4.65. 

RUT PO

Break-even at expiration is 4% higher and a maximum profit of 15.35 can be realized if RUT rallies 5.1% or more from where it was trading mid-day of Friday.