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IWM Call Spread Volume Surges—Buyers Net 20.8% Gain as Stock Outperforms SPY in Short-Term
A high-volume options trade hit the tape on iShares Russell 2000 ETF (IWM), with a large September 2025 call spread moving for a $185,000 premium and delivering buyers a 20.8% profit within hours. Here’s a closer look at the specifics and what the market is signaling about IWM’s outlook.
High-Volume Call Spread Nets Immediate 20.8% Gain for Buyers
At 9:41 a.m., traders executed a sizable call spread in IWM, buying 4,062 contracts of the September 19, 2025, 242/245 call spread at a volume-weighted average price (VWAP) of $0.91. Just two hours later, as of 11:30 a.m., that spread was trading for $1.10—a gain of $0.19 or 20.8% for those quick-moving buyers. The underlying stock rose $1.26 from the reference price of $239.33 to $240.59, providing a key driver for the spread’s jump.
| Trade Details | Value |
|---|---|
| Options Expiration | 19-Sep-25 |
| Call Spread Strikes | 242-245 |
| Number of Contracts | 4,062 |
| Days to Expiration | 2 |
| VWAP Trade Price | 0.91 |
| Spread Price as of 11:30 a.m. | 1.10 |
| Profit per Contract | 0.19 (20.8%) |
| Reference Stock Price | 239.33 |
| Stock Price as of 11:30 a.m. | 240.59 |
Traders committed over $185,000 to this trade, seeking a maximum potential profit near $424,000 if IWM settles above $245 at expiration. Explore more on this trade here.
Short-Term Performance: IWM Outpaces SPY Despite Longer-Term Lag
IWM’s near-term stock momentum has picked up: in the last 3 months, the ETF has returned +14.5% compared to SPY’s +9.6%. The past 2 weeks and month show similar outperformance, suggesting renewed risk appetite or rotational interest in small caps. Over one year, though, IWM remains an underperformer against SPY (+12.0% vs. +18.4%).
| Duration | IWM Return | SPY Return | IWM Low | IWM High |
|---|---|---|---|---|
| Today | +1.0% | -0.2% | 238.69 | 241.10 |
| 2 Weeks | +3.1% | +2.9% | 232.46 | 241.10 |
| 1 Month | +6.2% | +2.4% | 223.69 | 241.10 |
| 3 Months | +14.5% | +9.6% | 206.81 | 241.10 |
| 6 Months | +19.4% | +17.7% | 171.73 | 241.10 |
| 1 Year | +12.0% | +18.4% | 171.73 | 244.98 |
Recent upward price action aligns with technical uptrend indicators: IWM’s price sits above its 20, 50, and 250-day moving averages (by 2.5%, 5.7%, and 10.3% respectively). The current price of $240.59 is just 1.8% off the 52-week high.
Technical Indicators Are Bullish—Momentum Clearly Favoring Buyers
The technical picture is robust: IWM has broken above all short- and long-term moving averages, and the trend direction remains up. A surge of 14.5% in the past three months cements the ETF’s momentum turnaround. Despite a 40.1% rebound from the 52-week low, caution may be warranted as the price nears its 52-week highs and longer-term resistance zones.
- 20 Day Moving Average: 234.80
- 50 Day Moving Average: 227.63
- 250 Day Moving Average: 218.20
Option Skew Indicator: Bearish—Implied Volatility Signals Market Caution
While price momentum is clearly bullish, the 30-day option implied volatility skew is bearish, ranked at just 13% (on a scale where 100% is most bullish). This suggests the options market sees a higher probability of downside moves or is pricing in near-term risk, even as recent buyers of call spreads have profited handsomely. Market Chameleon’s skew indicator is a forward-looking metric: this reading reflects current market sentiment leaning cautious, perhaps in anticipation of volatility around the September expiration or macro headlines.
Takeaway: Short-Term Bulls Rewarded, But Option Market Remains Wary
The success of the recent IWM call spread highlights how technical uptrends can spark winning short-term trades—buyers captured a 20.8% gain in less than a trading session. But with options skew suggesting caution, this may be an inflection point for small caps.
Investors interested in finding more trades like this can explore this multi-leg trade screener for additional call spreads or complex option structures. While bullish momentum is intact, the options market is flashing mixed signals. This tug-of-war may offer tactical opportunities for traders willing to monitor IWM closely in the days ahead.
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NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated and may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices and were not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.
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