Small Cap Fund Draws Large Bearish Play

One trader is positioning for downside in small-caps stock with a big put spread in the iShares Russell 2000 Fund.

IWM fell 0.50 percent to $81.07 in late morning trading. It’s been climbing for more than two months, but recently was unable to follow larger-cap indexes like the S&P 500 and Nasdaq 100 to make new 52-week highs. That suggests sentiment is weaker toward the fund.

Today’s option volume is topped by a put spread in the December quarterly options, which expire on the last day of the year rather than the third Friday. A trader bought 12,285 of those 79 puts for $3.72 and sold an equal number of the 72 puts for $1.77.

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