The term CBOE Russell 2000 BuyWrite Index identifies a composite which monitors the overall performance of a hypothetical covered call plan between organizations within the Russell 2000. The CBOE Russell 2000 BuyWrite Index is released and preserved by the Chicago Board Options Exchange (CBOE) under an arrangement with The Frank Russell Company.
The CBOE Russell 2000 BuyWrite Index (BXR) was made to mimic the operation of a buy-write plan placed on the Russell 2000. Additionally known as a covered telephone, a buy-write is a way in that the buyer purchases a portfolio of stocks (in such a instance the Russell 2000) and sells call options over precisely the exact same “basket” of stocks. Buy-writes on average underperform stocks if their prices rise and out perform stocks if their prices fall.
The CBOE Russell 2000 BuyWrite Index is a passive indicator between purchasing stocks of organizations emerging from the Russell 2000 and the writing of a RUT telephone option. The RUT will generally perish in 1 month and also its physical exercise price is normally above the prevailing selling price of this indicator. First released in 2002, the CBOE Russell 2000 BuyWrite Index trades under the emblem BXR.