By Saqib Iqbal Ahmed
NEW YORK (Reuters) - U.S. small-cap stocks' long-awaited rally has ignited record trading in options contracts that would benefit from their persistent strength, though some strategists say further gains could be limited.
The small-company focused Russell 2000 is up 9% over the last 10 sessions while the tech-heavy Nasdaq 100 has slipped 3% over that period in a market rotation fueled by expectations of interest rate cuts and the improved fortunes of Republican presidential candidate Donald Trump.
The small-cap rally has been accompanied by a rush into bullish options. A record 1.35 million call options on iShares Russell 2000 ETF changed hands daily over the last 10 days, Trade Alert data showed.
The trade has faltered more recently as tech stocks came roaring back on Monday, and some analysts believe small stocks may struggle to make further headway after this month's explosive rally.