This past week was basically a tie between small and large cap stocks as the Russell 2000 (RUT) and Russell 1000 (RUI) were both up about 1.5%.  Four months into 2017 and RUI continues to maintain a lead of about 3.3% over RUT. 

RUT RUI 428

Last week VIX got smashed as did the CBOE Russell 2000 Volatility Index (RVX).  A return to the low end of the range resulted in the VIX / RVX relationship returning to higher levels.

  VIX RVX 428

With Weeklys available for trading all kinds of alternatives that were not available to option traders are now possibilities.  Every Friday if you have a price outlook for any of over 400 markets you will have options expiring.  Thursday last week someone had a bearish outlook for small caps.  This outlook stretched over about a day and a half of trading.  With the Russell 2000 at 1420 a trader sold the RUT Apr 28th 1410 Calls at 12.50 and purchased the RUT Apr 28th 1430 Calls for 1.81 and a net credit of 10.69.  this bear call spread payout as of this past Friday’s close appears below. 

RUT PO 428

This trade was well timed on Thursday and benefitted from small caps having a tough time on Friday losing 1.18% and finishing the week at 1400.43.