Mark Sebastian's Russell 2000 Trade

Speaking on Bloomberg Markets, Mark Sebastian of Option Pit suggested a bullish options trade in Russell 2000. He thinks higher interest rates are going to help the index to trade higher because it has a lot of small cap and mid cap banks.

Sebastian believes the Russell 2000 could be a big outperformer until the next Fed meeting and he wants to buy the July 1650 calls for $23, to make money on a potential move higher. He expects to double his money on the trade.

Traders who want to follow the trade, but prefer ETFs, could consider buying calls in iShares Russell 2000 Index (ETF) (NYSE: IWM).