economy
March 6, 2026
The sell-off has created a buying opportunity. How to trade while hedging risk using options
Jeff Kilburg walks CNBC Pro readers through this risk reversal trade.
TL;DR
- Geopolitical tensions with Iran and a weak jobs report are driving volatility in U.S. equity markets.
- WTI Crude Oil prices have surged, impacting market sentiment.
- President Trump's statements on the Iran conflict and the negative jobs report have accelerated selling in the S&P 500.
- Algorithmic trading systems may be exacerbating market movements.
- A risk reversal options trade on SPY is proposed, selling a put and buying a call to create a credit spread.
- This trade offers a potential profit of $235 per lot if SPY stays above a certain level, with a willingness to own SPY at a lower price if it declines further.
- The trader expresses cautious optimism for a market snapback.
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