Bullish call spread strategy proposed for S&P 500

Market sentiment has turned negative this month, with the S&P 500 experiencing a sharp 10% drop. Investors are feeling anxious, especially those with significant investments in large tech companies, often referred to as the "Magnificent Seven". This group includes Tesla, Nvidia, Alphabet, Amazon, Meta, Microsoft, and Apple, all of which have seen significant decreases in their stock prices. To navigate this uncertain environment, Jeff Kilburg suggests using a call spread strategy with the SPDR S&P 500 ETF (SPY). He believes there is a potential for the market to recover in light of Friday's massive options expiration, which involves nearly $5 trillion. Kilburg sees an opportunity for the S&P 500 to reclaim the key 200-day moving average if investor confidence improves. The trade involves buying a $575 call option for a cost of $4.50 and selling a $585 call option for $1.90, which establishes a bullish position. Executing this spread will cost the investor $2.60, or $260 per spread. However, Kilburg emphasizes the importance of being cautious, as markets remain volatile until key trade discussions are resolved in early April. Overall, this approach aims to reduce risk while still allowing for the possibility of profits as the market stabilizes.