Does such instrument exist?
Johnttttt writes: “I am looking for an instrument that follows RUT as closely as possible, that has high volume and liquidity and can bring profit even from small moves of RUT. The problem is that RUT itself cannot be traded because it’s an index and not instrument. Any ideas???”
My reply: You can trade the RUT with a number ways.
1. IWM – The Russell 2000 ETF. Its setup to match the performance of the RUT on a daily basis. You can buy it long or short it.
2. UWM/TWM – 2x beta Ruseell 2000 ETF’s. UWM = long, while TWM = short. If the RUT has a 1% day you will get 2% on your trade if you are in the correct direction.
3. The plethora of mutual funds that track the performance of the Russell 2000, some are 2x beta. I trade these almost daily.
4. You could trade index options on the Russell 2000 as well. This is the best bet for high profits off of small moves. However, probably the least volume and least liquidity, although its not that bad. I trade these too.
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