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Please help me with two questions:

  1. What is the best way to buy plain vanilla options on US large, mid, and small cap indexes, such as Russell. I’m looking for some actively tradeable options with time to expiration at least 6 months, preferably 1 year. I have accounts with Ameritrade and Merrill, but what I found is not very liquid.

  2. For all I see, options on individual stocks can be more liquid than options on ETFs that track major indexes. I also found that IWM options (Russell small cap) look far more liquid than Russell large and mid cap options. Why is that the case?

Thanks in advance

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The most active ETF options traded in the US is the SPY and in no particular order followed by IWM, EEM and QQQ. The next tier of active ETFs tends to be the SPDR ETFs depending on what's active in the market that day or week (tech, finance, precious metals, oil, etc.). The SPY is so active that the spreads are fairly narrow going out a good number of months.

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