“April showers bring May flowers” is an old adage. Current trade tariff negotiations feel closer to a flash flood than a simple shower. Inside of the uncertainty and dramatic increase in volatility, I want to take a hedged approach to produce income off the S & P 500 . Since President Donald Trump’s surprisingly severe trade tariff announcement, the S & P 500 has dropped another 5% in less than 36 hours. The magnitude of the tariffs caught global investors off-sides. Despite many investors believing this is just the blunt negotiating methods that Trump has historically used, the real economic consequences of these duties are limitless. This morning’s better-than-expected jobs report complicates markets even more. The U.S. economy added 228,000 jobs in March, well above expectations. This was the 51st consecutive month of jobs growth in the U.S., the second-longest streak in history. While this strong nonfarm payroll report rolled out, Fed Fund futures have significantly reacted to the trade tariff news, now pricing in a jaw-dropping five interest rate cuts for the rest of 2025. All of this uncertainty has alarmed investors and, instead of trying to catch a falling knife (that is seemingly still falling), I want to sell a put spread to define my risk — but also try to capture an income stream as fear runs its course in markets. The trade Sold the April 25 SPY $520 SPY put for $14.75 Bought the April 25 SPY $500 put for $$8.75 SPY was roughly trading $522 An investor will collect $6.00 on this put spread, or $600, and is risking $1400 to make $600 on this credit spread. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited! DISCLOSURES: Kilburg is long SPY, sold this put spread. 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.
