The market is in a classic “Great Rotation.” I believe this theme will persist, and I want to capitalize as further repositioning seems to be underway. With the Dow Jones Industrial Average only 2% off of its all-time highs above 50,000, I want to use options on the SPDR Dow Jones Industrial Average ETF Trust (DIA) to capture the next leg up. As investors have witnessed capital shifting out of concentrated, high-valuation Mag 7 darlings, Dow constituents have enjoyed inflows as investors flock towards broader, higher-quality and inexpensive blue chips. This has given life to the “broadening of stocks” narrative this year as so many forgotten about stocks are now resurging. In the S & P 500 Total Return Index, the other “never-mentioned” 493 stocks outside of the Magnificent 7 are having a tremendous start to 2026. If you strip out the Mag 7’s performance, the S & P 500 would be up closer to 10% versus being flat on the year. Valuation reset has certainly been a driver in illuminating many of the Dow Jones companies. If we look at the Top 5 names of the $DIA Dow Jones ETF (CAT,HON, XOM,CVX, and WMT) the rotation has been more than apparent. The investment thesis continues to be that these stocks should provide a better risk/reward and a margin of safety as volatility is here to stay. Lastly, why do I think the Dow Jones is going to run higher than its already historic $50k achievement is due to tangible economy tailwinds. Outside of the weaker GDP number this morning, we are experiencing strong U.S. growth, expected lowering of interest rates, infrastructure/AI power build outs, energy production growth, and resilient consumer spending. These inputs all favor the Dow’s mix of industrials, energy, staples, healthcare, and financials. The trade: Buying a call spread Bought the 3/27/2026 $495 Call for $8.00 Sold the $500 3/27/2026 $500 Call for $5.50 This call spread will cost an investor $2.50 or $250 This trade was executed when DIA was trading around $492. DISCLOSURES: Kilburg owns this spread. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its 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 CONSTITUTE 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.
The Dow is just below 50,000. How to trade a move above the key level using options
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