Bears load up bets against small-cap stocks ahead of economic data releases
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- IWM posted a 40% rally over the past year, outpacing the S&P 500’s 27% gain but lagging the Nasdaq‑100’s 39% rise.
- Put trading activity on the Russell 2000 captured over 70% of all options premium exchanged Wednesday, versus 60% on QQQ and under 40% on SPY.
- Put contracts outnumbered calls by roughly three‑to‑one, with more than 380,000 puts traded compared with under 270,000 calls, per ThinkOrSwim data.
- Treasury yields have recently hit multi‑year highs, prompting a six‑day rebound in bond prices that may be fueling the surge in put buying on small‑cap stocks.
- Trader executed an $8 million net long‑put spread on IWM, buying $11.4 million of July‑17 277‑strike puts and selling $3.6 million of June‑18 271‑strike puts, betting on a 7% decline by mid‑July.
Why it matters: Options sellers pocket $8 million in net premiums as they position for a 7% IWM decline, while rising Treasury yields shift capital toward safer assets among investors.
