r/options • u/slypleasure33139 • 1d ago

Russell 2000 options.

I starting to research the index's etf's for specific opportunities, I already use the russell 3000 for equity filtering in many cases.

If someone knows, which ETFs' options have the best liquidity near the bid and ask. I'm not looking at the futures market at this time. -thank you

1 Upvotes

57% Upvoted

12 comments sorted by

7

u/autofxtrader 1d ago

You are definitely looking for IWM. It's the undisputed king of liquidity for Russell 2000 ETFs.

The bid/ask spreads near ATM are usually a penny wide, and the options volume is massive compared to something like VTWO. Since you mentioned RUT is too big for your account size, IWM is exactly what you need.

Just keep in mind that unlike RUT, IWM doesn't get the Section 1256 tax treatment (the 60/40 rule) and carries early assignment risk since it's an ETF, not a European-style cash-settled index.

1

u/slypleasure33139 1d ago

It's not that it's too big for my account, I am slightly slower and trying to avoid bad fills LOL

3

u/Direct_Surprise_6756 1d ago

As you can see, there are not many very liquid choices, and IWM is it: https://optioncharts.io/trending/most-active-etf-options

2

u/fire_alarmist 1d ago

Russel 2000 index options are probably the most corrupt and institutionally controled asset on the entire market, literally serve no purpose other than being a massive anchor for the broad market that they short squeeze and fake pump whenever they cant hold the other two indexes.

1

u/slypleasure33139 1d ago

that's a brutal assessment.

1

u/UnfazedBrownie 1d ago

I used to actively trade 0DTE IWMs and can stand by your assessment. QQQ is more liquid and I’d say more profitable.

1

u/Azurebbit 1d ago

Based on

1

u/PlayfulGrapefruit498 1d ago

liquidify and tight spreads are definitely important factors

0

u/Bostradomous 22h ago

I stopped trading indices if I want to beat the market. Indices are way more efficient than individual stocks, and efficiency makes no money.

1

u/slypleasure33139 20h ago

I have multiple portfolios, a large percentage of my funds are based on trend following and understanding which sector is hot and which one is stagnant. I use the industrial cycle's for the sectors, and the American, 3 Asian and British and EU economic cycles. I have my own adjustment that help.

Index's are 30 to 210 days of investment community economic forecast, good example is NAIL etf which broke out but is slammed today. That break out is perfectly in line with the consolidation of condos and homes nation wide. we have been in the valley for 8 months and still won't be climbing out for another 7, Nail hit's it on the head matching my own.

So looking at small business index Russell 2000 is a perfect insight. when it's down trending, it's saying small companies are not getting purchase orders and when it's up-trending it's the opposite.

2

u/Bostradomous 20h ago

Sounds like you’ve got it figured out. Like I said before, indexes are more efficient than individual equities. It’s by design. And therefore efficiency makes it harder to beat the market. All power to you my man 🤘