Market sentiment soured quickly this month as investors endured an acute 10% correction in the S & P 500. With $4.6 Trillion in options expiring Friday, I want to approach the S & P 500 with cautious optimism. I am using SPDR S & P 500 ETF (SPY) to obtain upside capture in a possibly counter intuitive retracement higher in U.S. equities. SPY YTD mountain SPDR S & P 500 (SPY), YTD The about-face in equity markets has been attributed to the leadership in the Mag 7 deteriorating or repricing in recent weeks. The current skittishness in markets has been extra painful for investors with heavy tech exposure, specifically those owning Mag 7 stocks: Tesla, Nvidia, Alphabet, Amazon, Meta, Microsoft, and Apple. They are all enduring dramatic declines from their recent highs: Tesla: -50% Nvidia: -25% Alphabet: -22% Amazon: -20% Meta: -20% Microsoft: -19% Apple: -19% Friday’s option expiration is extraordinary and unusually massive with nearly $5 trillion of options expiring. Inside of this heavily influenced trading session, I believe the opportunity to retrace and reclaim the 200-day moving average in the S & P 500 exists. I want to define my risk in this option trade as markets will remain vulnerable until we vault over the trade tariff hurdle, supposedly April 2. The Trade (Bullish Call Spread) Bought the $575 SPY 4/17/2025 call for $4.50 Sold the $585 SPY 4/17/2025 call for $1.90 This trade was executed when SPY was roughly trading $559 This debit spread will cost an investor $2.60 or $260 per one spread DISCLOSURES: (Long Spy, long this spread, short SPY puts.) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
