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Options trading GOLDMAN SACHS: Buy these 10 stocks right now, as they’re primed to rocket higher after their upcoming earnings reports


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Options trading GOLDMAN SACHS: Buy these 10 stocks right now, as they’re primed to rocket higher after their upcoming earnings reports

This story is available exclusively on Business Insider Prime. Join BI Prime and start reading now. Vishal Vivek, equity and derivatives strategist for Goldman Sachs, says stocks are having unusually bad reactions to earnings in recent weeks. He’s recommending investors focus on these 10 stocks because they have a better-than-average chance to climb after they report…

Options trading GOLDMAN SACHS: Buy these 10 stocks right now, as they’re primed to rocket higher after their upcoming earnings reports

Options trading

This story is available exclusively on Business Insider Prime.
Join BI Prime and start reading now.

  • Vishal Vivek, equity and derivatives strategist for Goldman Sachs, says stocks are having unusually bad reactions to earnings in recent weeks. 
  • He’s recommending investors focus on these 10 stocks because they have a better-than-average chance to climb after they report earnings later this month.
  • He argues that options market positioning data is especially valuable since the average stock is actually having a negative reaction to earnings this quarter.  
  • Visit Business Insider’s homepage for more stories.

It might be hard to tell with stocks near all-time highs, but in one critical respect, the current earnings season has been pretty disappointing.

Goldman Sachs equity and derivatives strategist Vishal Vivek says most S&P 500 stocks have actually fallen on the day they’ve reported their earnings, which is a break from what typically happens. Vivek says the average stock reaction at this point is one of the worst of the past 24 years.

That makes it that much more important to find stocks that have a better-than-average chance of making gains. Vivek says he’s done that by combining options market data, short interest, and Goldman’s own estimates.

Listed below are the 10 stocks that Vivek believes have the highest probability of a gain the day they report earnings. They’re ranked from lowest to highest based on his calculation of how likely it is they are going to rise. All of these companies will make their quarterly reports over the next two weeks.

Also provided are the stock moves being implied by options trading on the shares. While those fluctuations could be in either direction, Vivek’s thinking is that buying the stocks with the highest likelihood of gains is a prudent way to realize positive returns.

Options trading 10. Transocean

options trading Transocean




MarketWatch



Ticker: RIG

Sector: Energy

Earnings report date: February 17

Probability of an up move: 53.4%

Implied move: +/- 9.3%

Source: Goldman Sachs

Options trading 9. Alibaba

options trading Alibaba




Markets Insider



Ticker: BABA

Sector: Consumer discretionary

Earnings report date: February 13

Probability of an up move: 53.4%

Implied move: +/- 5.8%

Source: Goldman Sachs

Options trading 8. Applied Materials

options trading Applied Materials




Markets Insider



Ticker: AMAT

Sector: Information technology

Earnings report date: February 12

Probability of an up move: 53.5%

Implied move: +/- 8.0%

Source: Goldman Sachs

Options trading 7. Parsley Energy

options trading Parsley Energy




Markets Insider



Ticker: PE

Sector: Energy

Earnings report date: February 19

Probability of an up move: 53.6%

Implied move +/-: 6.6%

Source: Goldman Sachs

Options trading 6. Laredo Petroleum

options trading Laredo Petroleum




MarketWatch



Ticker: LPI

Sector: Energy

Earnings report date: February 12

Probability of an up move: 53.7%

Implied move: +/- 20.1%

Source: Goldman Sachs

Options trading 5. Incyte

options trading Incyte




Markets Insider



Ticker: INCY

Sector: Healthcare

Earnings report date: February 13

Probability of an up move: 53.8%

Implied move: +/- 6.8%

Source: Goldman Sachs

Options trading 4. Seattle Genetics

options trading Seattle Genetics




Markets Insider



Ticker: SGEN

Sector: Healthcare

Earnings report date: February 6

Probability of an up move: 54.1%

Implied move: +/- 11.3%

Source: Goldman Sachs

Options trading 3. Yandex

options trading Yandex




Markets Insider



Ticker: YNDX

Sector: Communication services

Earnings report date: February 14

Probability of an up move: 54.1%

Implied move: +/- 7.0%

Source: Goldman Sachs

Options trading 2. EQT

options trading EQT




Markets Insider



Ticker: EQT

Sector: Energy

Earnings report date: February 12

Probability of an up move: 54.7%

Implied move: +/- 17.8%

Source: Goldman Sachs

Options trading 1. Universal Display

options trading Universal Display




Markets Insider



Ticker: OLED

Sector: Information technology

Earnings report date: February 20

Probability of an up move: 55.2%

Implied move: +/- 12.0%

Source: Goldman Sachs

Get the latest Goldman Sachs stock price here.

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