VB - RYLD: Small Cap Implied Volatility Dips Not Ideal For Selling Calls

2024-03-14 00:54:34 ET

Summary

• Russell 2000 implied volatility hits a two-month low, which means less in the way of option premium to be collected from selling upside calls.
• Small caps continue to struggle relative to large caps, but IWM's absolute chart shows signs of life, suggesting that owning IWM over RYLD today could make more sense.
• The Global X Russell 2000 Covered Call ETF has underperformed and may not be the best investment option right now given macro conditions, though seasonality is strong ahead.

Russell 2000 implied volatility has fallen to the lowest level in more than two months. The road is a bit less rocky for the embattled small-cap space lately, but the Russell 2000 ETF (IWM) remains well under its all-time high notched in November of 2021. ...

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