|By Marketwired .||
|July 16, 2014 03:10 PM EDT||
SEATTLE, WA -- (Marketwired) -- 07/16/14 -- The small cap "premium," or implied volatility for the small cap U.S. equity market as reflected by closing prices for the CBOE Russell 2000 Volatility Index (SM)(RVX(SM)) relative to implied volatility for the large cap U.S. equity market as measured by the CBOE Volatility Index® (VIX®), has exceeded 50% since July 2, significantly higher than the year-to-date average, and closed at 62.9% on Friday, July 11, its highest point since June 10.
At the same time, investor usage of options based on the Russell 2000® Index (RUT), as measured by average daily volume increase, has grown in 2014 relative to investor usage of options based on the S&P 500 Index (SPX). RUT options average daily volume was up 14% through June 30 relative to full year 2013, while average daily volume in S&P 500 Index-based options (SPX) was up 0.7% through June 30 relative to full year 2013. Russell 2000 Index-based futures (TF) average daily volume has increased 18% through June 30 relative to full year 2013, while average daily volume of S&P 500 Index-based futures (ES) has declined (-0.7%) through June 30 relative to full year 2013 (Source: Options Clearing Corporation, ICE, CME).
Small cap volatility has historically tended to be higher than large cap volatility. This "premium" averaged 28% over 2013 and was at just over a 38% average in 2014 to-date as of July 11. However, for April and May 2014 the premium averaged 50%, with an average RVX level of 20.00 and VIX level of 13.34. The premium hit a year-to-date high of 63% on June 10 (more than double the 2013 full year average).
"In the last week, increased overall market volatility, as measured by RVX(SM) and VIX(SM), and U.S. large cap market outperformance, as measured by the Russell 1000® Index, understandably led to increased interest in U.S. small cap equity options by traders and investors," said Russell Rhoads, CFA and instructor with The Options Institute at the Chicago Board Options Exchange. "So far this year as of July 11, the U.S. small cap Russell 2000 Index has underperformed the U.S. large cap Russell 1000® Index and RVX has been elevated to reflect investor's increased risk perception for small cap stocks."
"The fluctuation in the small cap premium we have witnessed this year as of July 11 through the relative performance of RVX & VIX helps illustrate that relative volatility levels for the U.S. large cap and small cap equity markets do not always move in lockstep," said Patrick Fay, director of index derivatives for Russell Investments. "This underscores the importance of considering small cap volatility measures rather than following a one-size-fits-all approach. Similar to 1984 when investors first welcomed the Russell 2000 Index to measure U.S. small cap equity market performance, investors and traders now welcome the CBOE Russell 2000 Volatility Index to measure U.S. small cap equity market implied volatility."
The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
Please note: Indexes are unmanaged and cannot be invested in directly. Returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment.
Russell's publication of the Indexes or Index constituents in no way suggests or implies a representation or opinion by Russell as to the attractiveness of investing in a particular security. Inclusion of a security in an Index is not a promotion, sponsorship or endorsement of a security by Russell and Russell makes no representation, warranty or guarantee with respect to the performance of any security included in a Russell Index.
Opinions expressed by Mr. Fay and Mr. Rhoads reflect market performance as of July 11, 2014 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance.
Forecasting is inherently uncertain and may be incorrect. It is not representative of a projection of the stock market, or of any specific investment.
Nothing contained in this material is intended to constitute legal, tax, securities or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax and investment advice from a licensed professional. The information, analysis and opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations for any individual entity.
Copyright © Russell Investments 2014. All rights reserved.
Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company.
Image Available: http://www2.marketwire.com/mw/frame_mw?attachid=2640798
The 19th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Digital Transformation, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportuni...
Aug. 26, 2016 04:00 PM EDT Reads: 3,916
StarNet Communications Corp has announced the addition of three Secure Remote Desktop modules to its flagship X-Win32 PC X server. The new modules enable X-Win32 to safely tunnel the remote desktops from Linux and Unix servers to the user’s PC over encrypted SSH. Traditionally, users of PC X servers deploy the XDMCP protocol to display remote desktop environments such as the Gnome and KDE desktops on Linux servers and the CDE environment on Solaris Unix machines. XDMCP is used primarily on comp...
Aug. 26, 2016 03:45 PM EDT Reads: 522
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
Aug. 26, 2016 03:15 PM EDT Reads: 382
DevOps at Cloud Expo – being held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real results. Am...
Aug. 26, 2016 01:30 PM EDT Reads: 3,402
Using new techniques of information modeling, indexing, and processing, new cloud-based systems can support cloud-based workloads previously not possible for high-throughput insurance, banking, and case-based applications. In his session at 18th Cloud Expo, John Newton, CTO, Founder and Chairman of Alfresco, described how to scale cloud-based content management repositories to store, manage, and retrieve billions of documents and related information with fast and linear scalability. He addres...
Aug. 26, 2016 01:00 PM EDT Reads: 1,964
Fact: storage performance problems have only gotten more complicated, as applications not only have become largely virtualized, but also have moved to cloud-based infrastructures. Storage performance in virtualized environments isn’t just about IOPS anymore. Instead, you need to guarantee performance for individual VMs, helping applications maintain performance as the number of VMs continues to go up in real time. In his session at Cloud Expo, Dhiraj Sehgal, Product and Marketing at Tintri, wil...
Aug. 26, 2016 12:30 PM EDT Reads: 617
Aspose.Total for .NET is the most complete package of all file format APIs for .NET as offered by Aspose. It empowers developers to create, edit, render, print and convert between a wide range of popular document formats within any .NET, C#, ASP.NET and VB.NET applications. Aspose compiles all .NET APIs on a daily basis to ensure that it contains the most up to date versions of each of Aspose .NET APIs. If a new .NET API or a new version of existing APIs is released during the subscription peri...
Aug. 26, 2016 12:00 PM EDT Reads: 1,902
Enterprises have forever faced challenges surrounding the sharing of their intellectual property. Emerging cloud adoption has made it more compelling for enterprises to digitize their content, making them available over a wide variety of devices across the Internet. In his session at 19th Cloud Expo, Santosh Ahuja, Director of Architecture at Impiger Technologies, will introduce various mechanisms provided by cloud service providers today to manage and share digital content in a secure manner....
Aug. 26, 2016 11:45 AM EDT Reads: 652
SYS-CON Events announced today that eCube Systems, a leading provider of middleware modernization, integration, and management solutions, will exhibit at @DevOpsSummit at 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. eCube Systems offers a family of middleware evolution products and services that maximize return on technology investment by leveraging existing technical equity to meet evolving business needs. ...
Aug. 26, 2016 11:45 AM EDT Reads: 575
Pulzze Systems was happy to participate in such a premier event and thankful to be receiving the winning investment and global network support from G-Startup Worldwide. It is an exciting time for Pulzze to showcase the effectiveness of innovative technologies and enable them to make the world smarter and better. The reputable contest is held to identify promising startups around the globe that are assured to change the world through their innovative products and disruptive technologies. There w...
Aug. 26, 2016 11:30 AM EDT Reads: 557
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
Aug. 26, 2016 11:20 AM EDT Reads: 332
Ixia (Nasdaq: XXIA) has announced that NoviFlow Inc.has deployed IxNetwork® to validate the company’s designs and accelerate the delivery of its proven, reliable products. Based in Montréal, NoviFlow Inc. supports network carriers, hyperscale data center operators, and enterprises seeking greater network control and flexibility, network scalability, and the capacity to handle extremely large numbers of flows, while maintaining maximum network performance. To meet these requirements, NoviFlow in...
Aug. 26, 2016 11:15 AM EDT Reads: 1,863
SYS-CON Events announced today that Hitrons Solutions will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Hitrons Solutions Inc. is distributor in the North American market for unique products and services of small and medium-size businesses, including cloud services and solutions, SEO marketing platforms, and mobile applications.
Aug. 26, 2016 10:45 AM EDT Reads: 527
To leverage Continuous Delivery, enterprises must consider impacts that span functional silos, as well as applications that touch older, slower moving components. Managing the many dependencies can cause slowdowns. See how to achieve continuous delivery in the enterprise.
Aug. 26, 2016 10:30 AM EDT Reads: 1,580
Internet of @ThingsExpo, taking place November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - comp...
Aug. 26, 2016 10:15 AM EDT Reads: 3,574