This Week in Russell 2000 and Nasdaq-100 Volatility – 2/21/2014

Ever since CBOE launched trading on the CBOE Russell 2000 Volatility Index (RVX – 19.20) I have been focused on the relationship between the S&P 500, Nasdaq-100, and Russell 2000.  The Russell 2000 was a champ in 2013 beating the S&P by almost 10%, but had been lagging the S&P 500 in 2014.  The key part of that statement is the word ‘had’ as the Russell 2000 was up over 1% while both the S&P 500 and Nasdaq-100 lost ground last week.   Despite the good week RVX is still slightly above the average spread relative to VIX over the last year or so.  I always believe there is a story behind the numbers and in this case I’m guessing risk perception for the US versus the rest of the world continues in a heightened state for 2014, despite the good week for the Russell 2000.

VXN RVX

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Russell Rhoads, CFA

CBOE Options Institute

Russell Rhoads, CFA, is a Senior Instructor with the Options Institute at the Chicago Board Options Exchange. He joined the Institute in 2008 after a career as an investment analyst and trader with a variety of firms including Highland Capital Management, Caldwell & Orkin Investment Counsel, TradeLink Securities and…

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