Russell 2000 Stock Options

RUT
 Index
  

 1,852  16.69  0.89%   

Russell 2000's option chain provides insight into all available option contracts written on Russell 2000's stock. Investors can see outstanding put and call contracts with pricing information and greeks for a given expiration period. In addition, each of Russell 2000's stock options below provides a detailed picture of the payoff. Comparing vital and dynamic information of various option contracts across diverse expiration periods will help you make an educated decision on your market timing strategies around investing in a given Russell option contract.
Purchasing Russell 2000 options can give investors a meaningful hedge against losses and, therefore, could be used conservatively to decrease the volatility of your portfolio. However, many options could also amount to little more than gambling, significantly enhancing your overall portfolio risk. One simple example of these aggressive strategies is the sale of "uncovered" Russell calls. Remember, the seller must deliver Russell 2000 stock to the call owner when a call is exercised.

In The Money vs. Out of Money Option Contracts on Russell 2000

Analyzing Russell 2000's in-the-money options over time can help investors to take a profitable long position in Russell 2000 regardless of its overall volatility. This is especially true when Russell 2000's options are deep in the money. These options can be identified using deltas that are over 0.75. Deep in-the-money Russell 2000's options could be used as guardians of the underlying stock as they move almost dollar for dollar with Russell 2000's stock while costing only a fraction of its price.
There are currently no option contracts written on Russell 2000 . The Russell 2000 option chain provides detailed quote and price information for the current Russell 2000 option contracts. It shows all of Russell 2000's listed puts, calls, expiration dates, strike prices, and other pricing information.

Open Interest Against 2022-11-30 Option Contracts

Russell 2000 option prices can potentially be used to forecast stock returns because most option chains provide information not only about the current prices but also about the future conditions in Russell 2000's lending market. For example, when Russell 2000's puts are not actively trading or completely missing in the marketplace, investors can use it to internalize expected shorting costs. So if an investor is writing a put option on Russell 2000, he or she must hedge the risk by shorting Russell 2000 stock over its option's life.
No Open Interest
The chart above shows Russell 2000's distribution of open interest by maturity on contracts that have not yet been settled. The area between the two highest points is the projection of the price at expiration. Russell 2000's open interest chart also provides vital information regarding the liquidity of an option. If there is no open interest for Russell 2000's option, there is no secondary market available for investors to trade.

Russell 2000 Maximum Pain Price across 2022-11-30 Option Contracts

Max pain usually refers to a trading concept that asserts that market manipulation can cause the market price of particular securities such as Russell 2000 close to expiration to expire worthless. According to most research, approximately 10% to 15% of all stock options are exercised, while about 35% expire worthlessly, with roughly 50% traded out before the expiration date. So, Max pain occurs when market makers reach a net positive position across all options at a strike price where option holders stand to lose the most money. By contrast, option sellers may reap the most after selling more options than buying, causing them to expire worthless.
No Max Pain Price
Russell 2000's stock options are financial instruments that give investors the right to buy or sell shares of Russell 2000 common stock at a specified price for a given time period. Generally speaking, an option to purchase or sell Russell stock makes it part of the underlying stock when the option's price is tied to the movement of the underlying stock. If Russell 2000's stock price goes up or down, the stock options follow.
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Please note that buying 'in-the-money' options on Russell 2000 lessens the impact of time decay, as they carry both intrinsic and time value. So, even if Russell 2000's value remains static through the expiration date, the investor can sell to close an 'in-the-money' option to avoid a potential loss. However, in-the-money Russell 2000 contracts are usually more expensive to enter than their out-of-the-money counterparts. So keep in mind that while the payoffs on an in-the-money trade can be high, the investors could ultimately experience a more consequential loss if Russell Index moves the wrong way.

Russell Current Options Market Mood

Russell 2000's open interest and total value indicators provide investors with the necessary information to digest the overall options buildup for its expiring contracts. In addition, it helps Russell Index's traders understand whether a recent fall or rise in the market is unreasonable and if the time has come to take contrarian positions. These ratios are calculated based on options trading volumes and current open interest.

Put-to-Call Open Interest

Put-to-Call Volume

Most options investors, including buyers and sellers of Russell 2000's calls and puts, are not very successful. It is estimated that an average options trader loses somewhere between 80% to 90% of the time. Russell 2000's option open interest and volume spread between outstanding puts and calls are regarded by many investors as reliable indicators of the overall future market direction. Using current Russell 2000's option volume and open interest to make an investment decision is considered a contrarian-sentiment measure that can be utilized in many timing strategies in both derivative and spot marketplace.

Rule 16 of the current Russell contract

Base on the Rule 16, the options market is currently suggesting that Russell 2000 will have an average daily up or down price movement of about 0.0197% per day over the life of the 2022-11-30 option contract. With Russell 2000 trading at $1852.5, that is roughly $0.37. If you think that the market is fully incorporating Russell 2000's daily price movement you should consider buying Russell 2000 options at the current volatility level of 0.32%. But if you have an opposite viewpoint you should avoid it and even consider selling them.

Be your own money manager

Our tools can tell you how much better you can do entering a position in Russell 2000 without increasing your portfolio risk or giving up the expected return. As an individual investor, you need to find a reliable way to track all your investment portfolios. However, your requirements will often be based on how much of the process you decide to do yourself. In addition to allowing all investors analytical transparency into all their portfolios, our tools can evaluate risk-adjusted returns of your individual positions relative to your overall portfolio.

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Check out Your Current Watchlist. You can also try Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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When running Russell 2000 price analysis, check to measure Russell 2000's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Russell 2000 is operating at the current time. Most of Russell 2000's value examination focuses on studying past and present price action to predict the probability of Russell 2000's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Russell 2000's price. Additionally, you may evaluate how the addition of Russell 2000 to your portfolios can decrease your overall portfolio volatility.
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