Traders Bet The Rebound in Risky Small Caps Has Further to Run

view original post

Traders are placing bullish bets on small-cap stocks even though they have struggled to outperform their larger cohort over the past year.

The increased prospect of Federal Reserve interest-rate cuts is driving investors to look more positively at the smaller-listed companies that benefit from lower rates. And a drop in the relative cost of upside options on the Russell 2000 Index is making the wager more attractive, strategists say.