Understanding Mini Russell 2000 Index
Mini Russell 2000 Index, sounds like a futuristic robot. However, it is one of the most popular tools in Future option trading. The Russell index Futures Index is designed to reflect the total return performance of the future contracts. This tool is used as pre-determined methodology for standard roll schedule in future contracts. In addition, it is one of the most efficient and cost-effective solution to gain market exposure to stock market.
Mini
Russell 2000 Index is a broad-based index that tracks 2000 small cap stocks
covering a wide variety of sectors. It is essentially considered a key
benchmark for small cap U.S market. It allows the participants to take position
on the performance of the Russell 2000 Index.
Why Do Traders Find Russell
2000 Appealing?
Well,
there are various reasons. It may include the board exposure to the most
attractive companies – they can invest. Since the index tracks many smaller
companies that operate in domestic market – it can also serve as a barometer of
U.S. economy.
What Is Russell 2000?
In simple
term, it is an index a slick financial tool that tracks the performance of 2000
small cap companies with the U.S.A. Typically it helps to track the performance
of the smallest companies in the index.
How to Russell 2000 Work?
Well,
essentially Russell 2000 Futures are financial contracts traders can buy and
sell where the commodity at stake is not wheat or gold – however, shares from
the Russell 2000 index. Typically, you are betting on the future performance of
the small-cap stocks.
These
future contracts represent $100 times the index. Evert tick or smallest price
movement is 0.10 hence, equivalent to $10. These contracts expire in March,
June, September and December. You should understand the specs as it can impact
potentially in gain, losses and overall trading strategy.
Bottom Line
Comments
Post a Comment