Small Caps, Big Momentum: The Rise of 0DTE Trading in Russell 2000® Index & ETF Options

Mandy Xu

March 13, 2026

Executive Summary:

Trading in Russell 2000 index (index ticker: RTY; options ticker: RUT) and the iShares Russell 2000 ETF (ticker: IWM) options have surged in recent years, with combined notional ADV hitting a record high of $65B, up 36% over the past year and over 6x since 2020. What’s driving the increase in trading activity in small caps? While partly reflecting cyclical factors such a rotation away from large-cap Tech, small caps have also benefited from several secular trends. Namely, the rise of retail trading and the growth in ultra short-dated options trading.
Since Cboe added Tue/Thu expiries to the Russell 2000 index in Jan’24 (and IWM in Apr’24), 0DTE options have taken off meaningfully in small caps. The share of 0DTE options in RUT has almost doubled, from 13% to 24%. The increase is even larger for IWM, where the share has grown from 15% to 39%.
In this report, we take a deep dive into RUT vs. IWM 0DTE options trading, breaking down the volume by customer type (retail vs. institutional), common strategies, risk exposure, as well as intraday trading patterns. We find that while both retail and institutional activity have picked up, the biggest increase has come from retail traders who now make up ~2/3 of all 0DTE trading in small caps.
There’s a notable difference in types of strategies deployed at the index vs. ETF level, with RUT options seeing a much more diverse set of 0DTE strategies compared to IWM – and that is true for both retail and institutional investors. Over three quarters of the retail trading in RUT 0DTE options are in complex strategies (vertical spreads and iron condors being the two most popular) while 92% of the retail flow in IWM 0DTE options are in simple outright puts/calls. See charts below. For more, see full report here.