Cboe Global Markets, Inc. announced today that it plans to launch Russell 2000® Index Weekly (RUTW) options expiring Tuesday and Thursday and Mini-Russell 2000® Index Weekly (MRUT) options, beginning Monday, January 8, 2024.
With these new listings, Cboe expands its suite of cash-settled Russell 2000 Index options to offer investors with expirations every trading day of the week.
The Russell 2000 Index is one of the world’s leading benchmarks for measuring the performance of US small-cap stocks. The addition of Tuesday and Thursday expirations will provide daily expirations for RUTW and MRUT options, allowing investors to potentially manage exposures to US small-cap stocks and execute targeted buy, sell or spread strategies around market events with greater precision , flexibility and control.
“Investors are becoming increasingly sophisticated and use short-dated index options for a variety of trading strategies,” said Catherine Clay, Executive Vice President and Global Head of Derivatives at Cboe. “As evidenced by the steady increase in volume over the past two years, short-dated index options have become an indispensable tool for hedging, risk management and income generation among a diverse base of market participants. As trading strategies become more regular and average time to expiration decreases, our clients are looking for even more detailed expirations. We are excited to continue working with FTSE Russell to offer daily expirations on the Russell 2000 Index options suite and to expand our clients’ abilities to trade short-dated strategies in additional new products.”
“FTSE Russell and Cboe share a deep commitment to providing innovative solutions that meet evolving market needs,” said Shawn Creighton, Director of Index Derivatives Solutions at FTSE Russell. “We are excited to continue to build on our successful relationship and leverage FTSE Russell’s position as a leading global index provider and Cboe’s deep expertise in derivatives trading to facilitate more tradable products and investment opportunities linked to the Russell 2000 index – the world’s most comprehensive and accurate measure of the small-cap segment of the US equity market.”
The RUTW and MRUT options are European-style options (no early exercise) and are cash-settled (no delivery or assignment of shares) at maturity by PM settlement. MRUT options are structured like standard RUTW options and similarly track the underlying Russell 2000 index, but have a smaller contract that is 1/10 the size. MRUT offers a potentially more cost-effective way to execute small-cap stock trading strategies.
RUTW and MRUT options are exclusively listed on the Cboe options exchanges. A total of 15.2 million RUT options contracts were traded in 20231, with an average daily volume (ADV) of 63,000 contracts, representing approximately $11 billion in average daily notional value, an increase of 39 percent from the previous year. The new Tuesday and Thursday expirations complement the existing suite of Weekly, End-of-Month and Quarterly RUTW and MRUT options.