Benefits of RUT Options
- Cash Settlement & European Exercise
- Trading account credited/debited in cash, no delivery of unwanted shares or market exposure. European style is only exercised at expiration, eliminating risk of early assignment
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- Certainty of Settlement, No Contra-Exercise Risk
- Cash settled European style options exercise at expiration, unlike American style, which may be exercised OTM after market close — eliminating potential economic and tax risk for writers
- Large Contract Size
- 10X the notional value of comparable ETF options
- 60/40 Tax Treatment
- Capital gains may benefit from 60/40 tax treatment*
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Historical Performance for the Russell 2000 vs S&P 500®
Trading RUT and RUTW
Cboe offers options on the Russell 2000 Index with standard and weekly expirations. RUT Weeklys options (RUTW) expire at the end of the day each Friday, while standard options expire on the third Friday of each month. Weekly options may be listed with expirations of up to six consecutive weeks.
Trading hours for Russell 2000 Index options are 9:30 a.m. – 4:15 p.m. (Eastern Time). On the last trading day, expiring RUT weekly options will trade until 4:00 p.m. and non-expiring RUT weekly options will continue to trade until 4:15 p.m. (Eastern Time).
Comparison of Russell 2000 Index Products
|Description||Russell 2000 Index Options - Traditional||Russell 2000 Index Options - Weeklys and End of Months||iShares® Russell 2000 Index Fund (IWM) Options|
|Root Ticker Symbol||RUT||RUTW||IWM|
|AM or PM Settlement||AM-settled||PM-settled||PM-settled|
|Settlement Type||Cash||Cash||Physical Shares of ETF|
Cboe Russell 2000 Volatility Index℠ vs. Cboe Volatility Index®
The Cboe Russell 2000 Volatility Index (RVX℠) is a key measure of market expectations of near-term small cap equity market volatility conveyed by Russell 2000 stock index option prices. When comparing volatility levels between the Cboe Volatility Index® (VIX® index) and RVX, the RVX typically trades at a higher level than VIX®.
Cboe Russell 2000 Benchmark Indices
Strategy benchmarks provide investors with a measure of the relative performance of Russell 2000 Index-based options strategies.
Evaluating Options For Enhanced Risk-Adjusted Returns
Cboe Russell 2000 Option Benchmark Suite and Case Studies on Fund Use of Options - Fund Evaluation Group (FEG)
Analyzing Russell 2000 Options-Based Benchmark Indexes Designed to Provide Enhanced Yields and Risk-Adjusted Returns
Improving Diversification by Harvesting Volatility Premiums: Cboe Russell 2000 Options Benchmark Suite Analysis
The inclusion of research not conducted or explicitly endorsed by Cboe should not be construed as an endorsement or indication of the value of any research.
Russell 2000 Index Options Agency Brokers
In order to assist institutional market participants that wish to source liquidity in Russell 2000® Index options products (tickers RUT & RUTW), listed on Cboe Global Markets, Inc. (Cboe), a list of agency brokers supporting institutional orders in RUT & RUTW is being provided in consideration for obtaining competitive markets.
This list is not an endorsement of the firms listed, and no significance should be attached to a firm's inclusion or omission. In connection with compiling this list, Cboe has not investigated the background or disciplinary history of any of the firms or their associated individuals listed or whether or not they have any required registration status necessary to perform these functions.
This list may not be exhaustive as it only includes those firms that have requested to be included on the list. Any agency brokers that would like to be included in or removed from this list should complete the Trading Permit Holder Consent Form .
List of agency brokers:
*Under section 1256 of the Tax Code, profit and loss on transactions in certain exchange-traded options, including RUT, are entitled to be taxed at a rate equal to 60% long-term and 40% short-term capital gain or loss, provided that the investor involved and the strategy employed satisfy the criteria of the Tax Code. Investors should consult with their tax advisors to determine how the profit and loss on any particular option strategy will be taxed. Tax laws and regulations change from time to time and may be subject to varying interpretations.