TWIFO 162: It's An Equities Palooza...Plus Silver, Hogs and More

• HOST: MARK LONGO, THE OPTIONS INSIDER MEDIA GROUP
• CO-HOST: SEAN SMITH, FTSE RUSSELL

EQUITIES

• VIX  17.65 (13.90) - UP NEARLY 4.5 FROM LAST SHOW - 
• HIT A HIGH OF 15.44 EARLIER THIS WEEK
• VVIX: 106 (91.5) -  UP 21 FROM LAST SHOW
• RVX: 19.65 (17.15) - 15.80 -  UP 3.85 
• VIX/RVX SPREAD - 2 (3.25) - TIGHTER BY .75 (wider by half a point from last week)
• Earnings season driving more volume in micro e-mini futures.
• Micro E-mini Equity futures traded a record high of 919.6K contracts ($13.5B notional) on July 31 as market participants looked to efficiently manage risk amid the FOMC rate cut announcement.

Russell US Equity Indices Reconstitution Results

• The Reconstitution event itself culminated in one of the highest trading volume days in US equity shares in the last year.  The Nasdaq Closing Cross, for instance, witnessed a record 1.279 billion shares, worth $42.59 billion, executed within 1.14 seconds2.
• Russell 3000® market capitalization hit an all-time high of $31.7 trillion on Reconstitution day, up 3% from a year earlier.
• Large caps led the charge.  The Russell 1000® gained 6.1% from last year’s rebalance through May 10, during which time the Russell 2000® posted a 5.5% decline.  At Reconstitution, Russell 1000® market cap was $29.3 trillion versus $28.2 trillion a year earlier.
• The technology sector emerged as the main driver of these gains, rallying nearly 40% since last year, abetted by big contributions from the consumer staples and healthcare sectors.
• The largest five companies in the Russell 3000® universe stood unchanged from 2018’s Reconstitution, but their rank order is rearranged.  
• Visa, at ninth place with $351.2 billion market cap, is the only new Top 10 entrant in this year’s Reconstitution, superseding Bank of America.
• Why Reconstitution matters

METALS - SILVER

• Silver options continue to grow in volume. July has seen two of the top ten all-time highest trading days, including over 33K contracts traded on July 19. 

FUTURES OPTIONS FEEDBACK 

• QUESTION FROM DORN2: Any updates on premium harvesting strats in the russell 2000 right now?
• QUESTION FROM NLENT: Why aren’t there options on the Russell 3000?
• COMMENT FROM FENS: I’m with you guys that join market functionality is really kind of scary. What happened to price discovery?
• QUESTION FROM JACK TRENT: Any interesting options action in hogs with the big down move this week?
• QUESTION FROM CLAMAGNE: Thank you for talking futures options every week. I wish more people followed your lead. I have a question about the volatility skew of crude oil. I heard your recent episodes where you mentioned there wasn’t much interest in an upside movement. Why do you think wti call skew has remained relatively week despite the big move down in crude oil futures?