Trading Techniques  |  MAR 2011

Empowering Traders With The Russell 2000 by Gail Mercer

Ever thought of trading the Russell 2000? Here’s how retail traders could benefit from trading this index. New traders are drawn to the emini Standard & Poor’s 500 like bees to honey. Go into any live trading room and chances are that the moderators are teaching traders to trade the emini S&P 500 because it has more liquidity than any other market. In Figure 1 the average annual volume is compared between the following emini indexes: emini S&P 500, Dow Jones Industrial Average (Dji a), Na sDa q 100, S&P MidCap 400, and the Russell 2000. It would be a logical assumption that the emini S&P 500 moves more than any other market. After all, volume fuels the markets, and the emini S&P 500 has more volume than any of the other indexes. However, let us look closer to see if the emini S&P 500 leads in tick movement or dollar movement.

by Gail Mercer