Russell 2000 Index Options

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Russell 2000 Index Options

Russell 2000 index options are option contracts in which the underlying value is based on the level of the Russell 2000, the market index most widely quoted when measuring the overall performance of the small to mid-cap common stocks traded in the United States.

The Russell 2000 index option contract has an underlying value that is equal to the full value of the level of the Russell 2000 index. The Russell 2000 index option trades under the symbol of RUT and has a contract multiplier of $100.

The RUT index option is an european style option and may only be exercised on the last business day before expiration.

Mini-sized Russell 2000 Index Option Contracts

To meet the needs of retail investors, smaller sized contracts with a reduced notional value are also available and goes by the name of Mini-Russell 2000.The Mini-Russell 2000 index option trades under the symbol RMN and its underlying value is scaled down to 1/10th of the Russell 2000.The contract multiplier for the Mini-Russell 2000 remains the same at $100.

Product Name Symbol Underlying Value Contract Multiplier Exercise Style
Russell 2000 Options RUT Full Value of Russell 2000 $100
(Full Contract Specs)
European
Mini-Russell 2000 Options RMN 1/10th of Russell 2000 $100
(Full Contract Specs)
European

How to Trade Russell 2000 Index Options

If you are bullish on the Russell 2000, you can profit from a rise in its value by buying Russell 2000 (RUT) call options. On the other hand, if you believe that the Russell 2000 index is poised to fall, then RUT put options should be purchased instead.

The following example depict a scenario where you buy a near-money RUT call option in anticipation of a rise in the level of the Russell 2000 index. Note that for simplicity’s sake, transaction costs have not been included in the calculations.

Example: Buy RUT Call Option (A Bullish Strategy)

You observed that the current level of the Russell 2000 index is 429.11. The RUT is based on the full value of the underlying Russell 2000 index and therefore trades at 429.11. A near-month RUT call option with a nearby strike price of 430 is being priced at $28.61. With a contract multiplier of $100.00, the premium you need to pay to own the call option is thus $2,861.00.

Assuming that by option expiration day, the level of the underlying Russell 2000 index has risen by 15% to 493.48 and correspondingly, the RUT is now trading at 493.48 since it is based on the full value of the underlying Russell 2000 index. With the RUT now significantly higher than the option strike price, your call option is now in the money. By exercising your call option, you will receive a cash settlement amount that is computed using the following formula:

Cash Settlement Amount = (Difference between Index Settlement Value and the Strike Price) x Contract Multiplier

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So you will receive (493.48 – 430.00) x $100 = $6,347.65 from the option exercise. Deducting the initial premium of $2,861.00 you paid to buy the call option, your net profit from the long call strategy will come to $3,486.65.

Profit on Long RUT 430 Call Option When Russell 2000 at 493.48
Proceeds from Option Exercise = Cash Settlement Amount
= (Index Settlement Value – Option Strike Price) x Contract Size
= (493.48 – 430.00) x $100
= $6,347.65
Investment = Initial Premium Paid
= $2,861.00
Net Profit = Proceeds from Option Exercise – Investment
= $6,347.65 – $2,861.00
= $3,486.65
Return on Investment = Net Profit / Investment
= 122%

In practice, it is usually not necessary to exercise the index call option to take profit. You can close out the position by selling the RUT call option in the options market. Proceeds from the option sale will also include any remaining time value if there is still some time left before the option expires.

In the example above, as the option sale is performed on expiration day, there is virtually no time value left. The amount you will receive from the RUT option sale will still be equal to it’s intrinsic value.

Limited Downside Risk

One notable advantage of the long Russell 2000 call strategy is that the maximum possible loss is limited and is equal to the amount paid to purchase the RUT call option.

Suppose the Russell 2000 index had dropped by 15% instead, pushing the RUT down to 364.74, which is way below the option strike price of 430. Now, in this scenario, it would not make any sense at all to exercise the call option as it will result in additional loss. Fortunately, you are holding an option contract, and not a futures contract, and so you are not obliged to anyway. You can just let the option expire worthless and your total loss will simply be the call option premium of $2,861.00.

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E-mini Russell 2000 Index Futures and Options

E-mini Russell 2000® Index futures and options on futures extend CME Group’s suite of benchmark U.S. index products and offer you even more ways to manage risk and tap into liquidity.

Product Last Change Chart Globex Vol

Product Benefits

Liquidity
With ADV and open interest, E-mini Russell 2000 Index futures offer the liquidity to efficiently and effectively manage risk.

Product Choice
Trade futures on the Russell 2000 and Russell 2000 Growth and Value indices, and fine-tune your options trading strategy with quarterly, weekly and end-of-month options on E-mini Russell 2000 Index futures.

Cost Savings
Enjoy margin offsets of up to 80% 1 with other CME Equity Index futures and potential cost savings of 56bps-102bps 2 when you trade Russell 2000 futures in lieu of ETFs.

Ways to Trade
Choose from central limit order book (CLOB) trading on CME Globex, block trades, Basis Trade at Index Close (BTIC), Trade at Cash Open (TACO) and exchange for physical (EFP) transactions to execute your E-mini Russell 2000 strategy.

About the Russell 2000 Index

A benchmark for U.S. small-cap stock performance, the Russell 2000 Index consists of the lower

2,000 small-cap stocks in the Russell 3000 Index. The Russell 2000 Index is a broad-based market capitalization-weighted index that encompasses a range of sectors of the economy.

Performed annually, Russell U.S. index reconstitution realigns the indices to ensure they remain an accurate reflection of the U.S. markets. During this multi-week process, FTSE Russell updates changes in market capitalization, sector composition, company rankings and style orientation.

Trade against the open or close

Basis Trade at Index Close (BTIC)

BTIC enables you to execute a basis trade relative to the official close for the underlying index for more efficient cash management. BTIC is available for E-mini Russell 2000, E-mini Russell 2000 Growth, E-mini Russell 2000 Value, and Russell 2000 Total Return futures to provide greater trading flexibility.

Russell 2000 Index

Russell 2000 Ishares ETF (IWM)

The information below reflects the ETF components for Russell 2000 Ishares ETF (IWM).

Summary of Russell 2000 Stocks With New Highs and Lows

(1923 Total Components) 5-Day 1-Month 3-Month 6-Month 52-Week Year-to-Date
Today’s New Highs (% of total) 1,314 (68%) 157 (8%) 13 (1%) 11 (1%) 6 (0%) 12 (1%)
Today’s New Lows (% of total) 55 (3%) 6 (0%) 6 (0%) 6 (0%) 6 (0%) 6 (0%)
Difference 1,259 151 7 5 0 6

Russell 2000 Components

Stocks: 15 20 minute delay (Cboe BZX is real-time), ET. Volume reflects consolidated markets. Futures and Forex: 10 or 15 minute delay, CT.

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This page provides details for the Index you are viewing. At the top, you’ll find a histogram containing today’s high and low price. The histogram shows where the open and last price fall within that range. Below is a histogram showing the 52-week high and low. A chart also shows you today’s activity.

Screen

Available only with a Premier Membership, you can base a Stock Screener off the symbols currently on the page. This lets you add additional filters to further narrow down the list of candidates.

  1. Click “Screen” on the page and the Stock Screener opens, pulling in the symbols from the Components page.
  2. Add additional criteria in the Screener, such as “20-Day Moving Average is greater than the Last Price”, or “TrendSpotter Opinion is Buy”.
  3. View the results and save them to a Watchlist, or save the Screener to run again at a later date.
  4. Running a Saved Screener at a later date will always present a new list of results. Your Saved Screener will always start with the most current set of symbols found on the Components page before applying your custom filters and displaying new results.
Percentage of Stocks Above Moving Average

For the major indices on the site, this widget shows the percentage of stocks contained in the index that are above their 20-Day, 50-Day, 100-Day, 150-Day, and 200-Day Moving Averages.

In theory, the direction of the moving average (higher, lower or flat) indicates the trend of the market. Its slope indicates the strength of the trend. Longer averages are used to identify longer-term trends. Shorter averages are used to identify shorter-term trends. Many trading systems utilize moving averages as independent variables and market analysts frequently use moving averages to confirm technical breakouts.

When prices are rising they are usually above the average. This is to be expected since the average includes data from the previous, lower priced days. As long as prices remain above the average there is strength in the market.

Components Table

The components table shows you the stocks that comprise the index.

Barchart Data Table

Data tables on Barchart follow a familiar format to view and access extensive information for the symbols in the table.

Pages are initially sorted in a specific order (depending on the data presented). You can re-sort the page by clicking on any of the column headings in the table.

Views

Most data tables contain multiple standard “Views”, and each View contains “Links” to each symbol’s Quote Overview, Chart, Barchart Opinion, and Technical Analysis page. A View simply presents the same symbols with different columns. Site members can also display the data using any Custom View. (Simply create a free account, log in, then create and save Custom Views to be used on any data table.) Standard Views on the Index page include:

    Main View: Symbol, Name, Last Price, Change, Percent Change, High, Low, and Time of Last Trade.

Technical View: Symbol, Name, Last Price, Today’s Opinion, 20-Day Relative Strength, 20-Day Historic Volatility, 20-Day Average Volume, 52-Week High and 52-Week Low.

Performance View: Symbol, Name, Last Price, Weighted Alpha, YTD Percent Change, 1-Month, 3-Month and 1-Year Percent Change.

Data Table Expand

Unique to Barchart.com, data tables contain an “expand” option. Click the “+” icon in the first column (on the left) to “expand” the table for the selected symbol. Scroll through widgets of the different content available for the symbol. Click on any of the widgets to go to the full page.

Horizontal Scroll on Wide Tables

Especially when using a custom view, you may find that the number of columns chosen exceeds the available space to show all the data. In this case, the table must be horizontally scrolled (left to right) to view all of the information. To do this, you can either scroll to the bottom of the table and use the table’s scrollbar, or you can scroll the table using your browser’s built-in scroll:

  • Left-click with your mouse anywhere on the table.
  • Use your keyboard’s left and right arrows to scroll the table.
  • Repeat this anywhere as you move through the table to enable horizontal scrolling.
FlipCharts

Also unique to Barchart, this feature allows you to scroll through all the symbols on the table in a chart view. FlipCharts are a free tool available to Site Members.

Download

This tool will download a .csv file (compatible with many spreadsheet programs) for the View being displayed. Download is also a free tool available to Site Members.

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