Stocks moved slowly higher last week with small caps edging out large caps.  The Russell 2000 (RUT) gained 0.82% while the Russell 1000 (RUI) moved up 0.35%.  For the year RUI has over a 6% lead so I’m ready to award the performance win to large caps for 2017. 

RUT RUI 12222017 Fixed

Most of this year the Cboe Russell 2000 Volatility Index has remained at a historically high premium relative to VIX.  This relationship dropped last week, but it still much higher than the long term average in the 20% range. 

RVX VIX 12222017

Late Friday, one trader decided they have a good idea that the Russell 2000 will not finish the year over 1570.  With RUT at 1542.93 (the close) there was a seller of the RUT Dec 29th 1570 Calls at 1.25 who purchased the RUT Dec 29th 1580 Calls at 0.70 taking in a net credit of 0.55. 

RUT PO 12222017

If held through the close this coming Friday this trade works out as long as the Russell 2000 doesn’t experience a year-end rally of 1.75%.