Which options exchanges is russell 2000 traded on
During the entire rally in smallcaps, an interesting indicator did something that it wasn't supposed to. I'll show you what's going on in just a moment, but first let's take a look at where the Russell RUT index currently sits. Smallcaps had a monster of a rally without any kind of pullback at all.
I attribute this to rotation out of high-beta tech and into riskier names. Whatever the reason, which options exchanges is russell 2000 traded on was a massive trend with little or no reversion. RUT has had rallies like this only 3 other times over the past decade, and those other 3 times have led to range-bound price action.
Now let's take a look at the indicator that has moved a little unexpectedly. It measures the supply and demand for RUT options. It trades very similar to the VIX-- when the market sells off, investors want to hedge so they buy protection. That rise in demand causes an uptick in volatility markets. Pretty odd, don't you think? You'd expect that with this kind of rally, investors would be popping champagne and letting their bets run higher.
This tells me that Think about it-- if you have RUT puts bought, and then the market drops, you will close those hedges. When you close the hedges, the market makers take the other side and then buy the market to get neutral. Iron Condors are a trade strategy where you profit based off a which options exchanges is russell 2000 traded on rather than picking a direction. You can earn consistent returns without needing to try and time the market. I like starting to sell iron condors in December options-- the premium is high enough and you have plenty of wiggle room in either direction to manage your risk.
We'll be sending out iron condor trade alerts to our service IncomeLab. I've put together an Iron Condor Trading Toolkit that gives you the case studies and training needed to be consistently profitable in the market. Click Here to Get the Toolkit. Because funds need to play catch-up into the end of the year. Well, here's what has happened: This hedge-closing can help to buoy the market. RUT starts to establish a trading range as the momentum we saw over the past month is pretty rare and we tend to see the "trendiness" drop.
RUT options still have a healthy premium We probably won't see a massive pullback as which options exchanges is russell 2000 traded on will step up and hedgers will close their positions.
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