Small cap stocks have been on a tear over the last month, with iShares Russell 2000 ETF (IWM) up nearly 11% in that span, observes Jay Soloff of Investors Alley.
IWM is a heavily traded index ETF that tracks small-cap stocks, which sometimes represents the value trade. At least one big trader is using covered calls to express a very bullish position on IWM through January expiration. The trader sold 10,000 January 210 calls while buying 1 million shares of IWM trading right around $190. This trade provides a small amount of income to go along with the December dividend, while still allowing for $20 of stock appreciation.
Learn more about Jay Soloff at Investors Alley.
