$BUY SPY SEP 5 645/655 BULL CALL SPREAD (Out-of-the-Money)

I recommend this out-of-the-money bull call spread because the Jackson Hole Symposium and Powell’s speech on Friday, August 22, 2025, are key catalysts likely to trigger volatility and a potential upside move in SPY if Powell signals a dovish pivot or confirms rate cuts. The market is currently cautious but positioned for a rally, and buying OTM calls offers leveraged upside with limited risk in a low IV environment[2][3][4][5].

Trade Details:

• Buy 645 call (OTM, approx. $1.80 - $2.00 ask)
• Sell 655 call (further OTM, approx. $0.70 - $0.85 bid)
• Expiration: September 5, 2025 (post-Jackson Hole, capturing immediate reaction)
• Net Debit: Around $1.20 to $1.30 (buy 645 call ask minus sell 655 call bid)

Stock Price: $638.11

📊 Trade Metrics

• Max Risk: ~$130 per spread (debit paid)
• Max Reward: $870 per spread (difference between strikes $10 minus debit)
• Breakeven at Expiration: ~$646.30 (645 strike + debit)
• Days to Expiration: 16

📈 Greeks & Volatility

• IV: 13.4% (very low, premium is cheap for buying)
• IV Rank: 1% (favors buying premium pre-event)
• Expected Daily Move: ±5.39 points (~0.84%)
• Put/Call Volume Ratio: 0.13 (bullish call skew, strong call demand)

🎯 Why This Trade
Powell’s Jackson Hole speech often drives short-term volatility and directional moves. The market is pricing in some uncertainty around rate cuts in September, and the current technical setup shows SPY supported just above 20-day and 50-day moving averages. The low implied volatility and strong call buying indicate a good opportunity to buy OTM calls to leverage a potential rally if Powell signals easing or policy flexibility[2][3][4][5]. This spread limits risk to the debit paid while offering a large upside if SPY rallies above 655.

🔍 Market Overview
The market is cautious ahead of the Jackson Hole Symposium, with tech stocks recently weak and some rotation into small-cap/value expected if Powell signals a softer landing. SPY at $638.11 is technically supported, but the low IV environment means premium is cheap, making long calls attractive. The September 5 expiry captures the immediate post-speech move while avoiding longer-term exposure to other events. The put/call volume ratio and recent unusual call activity suggest bullish sentiment into the event[1][2][3][4][5].

💡 Trade Management

• Entry: Place limit order near $1.25 debit (mid of bid/ask spread)
• Target: Close at $2.00+ (60%+ profit) if SPY rallies above 655
• Stop: Exit if SPY falls below 630 before the event to preserve capital
• Time Stop: Close or roll before expiration if no move by Sept 3

⚠️ Options Expiration Validation

• Expiration: September 5, 2025 (after Jackson Hole and Powell speech)
• No earnings for SPY; NFP on Sept 5 is after expiration

This OTM bull call spread offers a low-cost, defined-risk way to play a potential upside move in SPY from Powell’s Jackson Hole speech, leveraging current bullish option flow and technical support at SPY’s price of $638.11.