The Week in Russell 2000 Trading – 6/15 – 6/19

Small cap stocks dominated last week as the Russell 2000 (RUT) rose 1.55% and even put up an all-time record close on Thursday. Large cap stocks fared OK with the Russell 1000 (RUI) rising 0.66% last week, but unlike the RUT, RUI did not manage to put in a new all-time closing high. We have almost reached the middle of the year and so far RUT is up 6.64% while RUI has risen 3.05%.

Russell 1000 - 2000

Large cap expected volatility is best represented by the CBOE Volatility Index (VIX) which was a tad higher last week, moving from 13.78 to 13.96, despite the gain in large cap stocks. The CBOE Russell 2000 Volatility Index (RVX) was also a bit higher rising from 16.23 to 16.33. In this space I like to focus on the relationship between these two forward looking volatility measures as an indication of the relative risk perception of owning small cap or large cap stocks. That risk moved down slightly on a week over week basis to remain at pretty low levels relative to recent history.


As the RUT moved to a record high on Friday there were some pretty interesting late day trades. This is not something I would suggest for the faint of heart, but as the day came to an end and RUT was near 1285 there was a seller of Jun 19th 1300 Calls at 0.25 who paid 0.10 for the Jun 19th 1310 Calls for a net credit of 0.15. Remember RUT options are AM settled, even the Weeklys. These trades occurred in the afternoon on the 18th and were held overnight into Russell 2000 Settlement (RLS) on the open Friday, which came in at 1286.11. A move over 1300.15 would have resulted in a loss which could have been capped at 9.85 with RLS coming in 1310 or higher.