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The small-cap iShares Russell 2000 Index ETF (IWM) hit a new all-time high on Monday, June 4, delivering substantial profits to upside option positions opened less than three weeks prior.

On May 15, Investitute's proprietary programs showed that investors bought 10,000 IWM $164 calls expiring on June 8 for $0.41 with shares at $158.99. These were new positions, as open interest in the strike was a mere 834 contracts before the activity appeared.

The investors likely positioned the buys on a bet that the Russell 2000 Index would continue to outperform the broader market and break out above its previous highs.

The index exchange-traded fund has been grinding higher since its Feb. 9 low, bucking some pundits' calls that this is a late-stage bull market, where small-cap companies historically underperform their larger peers as borrowing costs for debt rise along with interest rates.

The mostly domestic holdings of the Russell 2000 have been perceived as less sensitive to tariff and trade worries, as well as benefiting from deregulation.

New buyers of those 08June $164 calls paid up to $1.32 for those contracts Monday, more than 3 times their initial purchase price. The stock rose 3.5% in the same time frame, illustrating how options can far outperform their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because investors can't lose more than the price of the options no matter how far the stock might fall.

The iShares Russell 2000 Index ETF was up 0.53% to close at a new lifetime high of $164.71 on Monday.