Index Options & Futures Trading - Russell 2000
Stock Market Investing &
Trading System
An
index measuring the performance of the 2,000 smallest companies in the
Russell 3000 Index, which is made up of 3,000 of the biggest U.S.
stocks.
RUT is the symbol for options based on the
Russell 2000
(RUT) Index, a leading benchmark for the performance of
small-capitalization stocks. Options on the Russell 2000 have a $100
multiplier, so that, for example, if the Russell 2000 price is at 480, an
investor might consider hedging a $48,000 small-cap portfolio with one RUT
option.
Russell 2000 Index Options Contracts & Futures Trading Contracts
|
Securities |
Issuer |
Type |
Symbol / Root |
|
Russell 2000 Index Options |
CBOE |
Options |
RUT |
|
Russell 2000 |
CME |
Options on Futures |
RL |
|
Russell 2000 |
CME |
Futures |
RL |
|
About the Russell 2000 Index Methodology
The Russell 2000
Index was created in 1984 by
Frank Russell Company and was designed to
track the performance of small-cap companies. RUT options, trading
exclusively at the Chicago Board Options Exchange, make it simple to
participate in the small-cap market.
The popularity of the Russell 2000 as a small-cap benchmark leads to
four fundamental reasons for using RUT options:
Simplicity
Investors are able to trade a broad market by making one RUT trading
decision rather than making the many decisions involved with investing in
numerous individual stocks.
Insurance
Russell 2000 options offer a convenient and easy way to help reduce the
market risk of a broad market portfolio of many small-cap stocks, without
disrupting the make-up of the portfolio.
Predetermined Risk
RUT option purchasers risk only the premium they pay for the option. The
risk is both known and limited.
Purchasing Russell 2000 Index Options
Purchasing RUT options, instead of buying or selling thousands of
individual stocks, provides an investor with an additional opportunity to
use investment capital elsewhere. For a relatively small percentage gain
in the underlying index, a DJX option can increase in value by a multiple
of that gain, assuming the correct option series was selected.
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