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Options trading GOLDMAN SACHS: These 24 single-stock trades can help you make big returns in August as the pandemic creates a wildly unpredictable back-to-school season

Options trading GOLDMAN SACHS: These 24 single-stock trades can help you make big returns in August as the pandemic creates a wildly unpredictable back-to-school season

Options trading GOLDMAN SACHS: These 24 single-stock trades can help you make big returns in August as the pandemic creates a wildly unpredictable back-to-school season

Options trading GOLDMAN SACHS: These 24 single-stock trades can help you make big returns in August as the pandemic creates a wildly unpredictable back-to-school season

Options trading GOLDMAN SACHS: These 24 single-stock trades can help you make big returns in August as the pandemic creates a wildly unpredictable back-to-school season


Options Market News

Options trading GOLDMAN SACHS: These 24 single-stock trades can help you make big returns in August as the pandemic creates a wildly unpredictable back-to-school season

Premium Justin Sullivan/Getty Images This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. The combination of earnings and back-to-school shopping makes August a historically bumpy month for retailers, according to Vishal Vivek of Goldman Sachs.This year, retailers face even more uncertainty because of questions about school openings during…

Options trading GOLDMAN SACHS: These 24 single-stock trades can help you make big returns in August as the pandemic creates a wildly unpredictable back-to-school season

Options trading


Premium

options trading back to school shoppingoptions trading back to school shopping



Justin Sullivan/Getty Images


This story is available exclusively to Business Insider subscribers.
Become an Insider and start reading now.

  • The combination of earnings and back-to-school shopping makes August a historically bumpy month for retailers, according to Vishal Vivek of Goldman Sachs.
  • This year, retailers face even more uncertainty because of questions about school openings during the pandemic and the possibility of more economic relief from Congress.   
  • Despite that, Vivek said the options market seemed to expect less volatility than usual from many retailers that will report their earnings this month.
  • Click here to sign up for our weekly newsletter Investing Insider.
  • Visit Business Insider’s homepage for more stories.

Back-to-school season can be stressful in the best of years, and it turns out retailers feel the strain too.

Volatility for US retail stocks spikes during August thanks to the combination of back-to-school shopping and quarterly earnings, Vishal Vivek, Goldman’s equity-derivatives associate, said.

“The average stock in the XRT realizes 20% higher volatility in August relative to other months,” Vivek wrote in a note to clients, referring to the SPDR S&P Retail ETF.

To put it another way, he found that the volatility of those stocks in August over the past decade was double that of the average S&P 500 stock.

This year, that gap could be multiplied because of uncertainty over school openings and questions about whether Congress will pass a new economic-relief bill.

Despite all that, Vivek said the options market was pricing in less volatility for most of these stocks than they’ve recently delivered when they’ve reported their earnings.

That makes this a smart time to use an options-based strategy, he said. The opportunity he’s focused on involves betting on greater-than-expected volatility by buying September 20 straddles, or puts and calls with the same strike price.

“We see potential for higher than usual volatility in these names over the next month, driven by broadly elevated expectations, and an uncertain macro environment,” he wrote.

With that in mind, these 24 companies are all set to report earnings in August. They’re arranged from lowest to highest based on the difference between the volatility the options market is pricing in for the day and the size of the stock’s earnings-day moves over the past eight quarters.

For almost all of them, there is a substantial gap, suggesting that the options market is underestimating how much they could move.

Vivek added that earnings expectations looked high for Kohl’s, Urban Outfitters, and Gap, while positioning on Dollar General, Macy’s, and Nordstrom is notably bearish relative to history, and positioning on Target and Dollar Tree options is bullish.

Read more:

Options trading 24. Dollar Tree

options trading Dollar Tree




Markets Insider



Ticker: DLTR

Earnings date: August 27

Implied earnings move: 5.2%

Historic move: 7.8%

Expectations gap: -2.6%

Source: Goldman Sachs

Options trading 23. Target

options trading Target




Markets Insider



Ticker: TGT

Earnings date: August 19

Implied earnings move: 6.4%

Historic move: 8.4%

Expectations gap: -2.0%

Source: Goldman Sachs

Options trading 22. Dollar General

options trading Dollar General




Markets Insider



Ticker: DG

Earnings date: August 27

Implied earnings move: 5.7%

Historic move: 5.7%

Expectations gap: 0%

Source: Goldman Sachs

Options trading 21. Big Lots

options trading Big Lots




Markets Insider



Ticker: BIG

Earnings date: August 28

Implied earnings move: 12.2%

Historic move: 11.9%

Expectations gap: 0.3%

Source: Goldman Sachs

Options trading 20. Guess

options trading Guess




Markets Insider



Ticker: GES

Earnings date: August 26

Implied earnings move: 24.8%

Historic move: 24.5%

Expectations gap: 0.3%

Source: Goldman Sachs

Options trading 19. Best Buy

options trading Best Buy




Markets Insider



Ticker: BBY

Earnings date: August 25

Implied earnings move: 7.1%

Historic move: 6.6%

Expectations gap: 0.5%

Source: Goldman Sachs

Options trading 18. Ollie’s Bargain Outlet

options trading Ollie's Bargain Outlet




Markets Insider



Ticker: OLLI

Earnings date: August 27

Implied earnings move: 7.9%

Historic move: 6.9%

Expectations gap: 1.0%

Source: Goldman Sachs

Options trading 17. Abercrombie & Fitch

options trading Abercrombie & Fitch




Markets Insider



Ticker: ANF

Earnings date: August 27

Implied earnings move: 16.6%

Historic move: 15.3%

Expectations gap: 1.2%

Source: Goldman Sachs

Options trading 16. Walmart

options trading Walmart




Markets Insider



Ticker: WMT

Earnings date: August 18

Implied earnings move: 4.4%

Historic move: 3.1%

Expectations gap: 1.3%

Source: Goldman Sachs

Options trading 15. Five Below

options trading Five Below




Markets Insider



Ticker: FIVE

Earnings date: August 26

Implied earnings move: 7.5%

Historic move: 6.0%

Expectations gap: 1.5%

Source: Goldman Sachs

Options trading 14. Macy’s

options trading Macy's




Markets Insider



Ticker: M

Earnings date: August 12

Implied earnings move: 8.8%

Historic move: 7.1%

Expectations gap: 1.7%

Source: Goldman Sachs

Options trading 13. Nordstrom

options trading Nordstrom




Markets Insider



Ticker: JWN

Earnings date: August 19

Implied earnings move: 11.4%

Historic move: 9.5%

Expectations gap: 1.9%

Source: Goldman Sachs

Options trading 12. Ulta Beauty

options trading Ulta Beauty




Markets Insider



Ticker: ULTA

Earnings date: August 27

Implied earnings move: 11.%

Historic move: 9.1%

Expectations gap: 2.0%

Source: Goldman Sachs

Options trading 11. Burlington Stores

options trading Burlington Stores




Markets Insider



Ticker: BURL

Earnings date: August 27

Implied earnings move: 9.9%

Historic move:  7.7%

Expectations gap: 2.2%

Source: Goldman Sachs

Options trading 10. L Brands

options trading L Brands




Markets Insider



Ticker: LB

Earnings date: August 19

Implied earnings move: 12.5%

Historic move: 10.1%

Expectations gap: 2.4%

Source: Goldman Sachs

Options trading 9. TJX Cos.

options trading TJX




Markets Insider



Ticker: TJX

Earnings date: August 18

Implied earnings move: 6.3%

Historic move: 3.7%

Expectations gap: 2.7%

Source: Goldman Sachs

Options trading 7. Dick’s Sporting Goods

options trading Dick's Sporting Goods




Markets Insider



Ticker: DKS

Earnings date: August 26

Implied earnings move: 9.4%

Historic move: 6.4%

Expectations gap: 2.9%

Source: Goldman Sachs

Options trading 6. Advance Auto Parts

Real Life. Real News. Real Voices

Help us tell more of the stories that matter

Become a founding member

options trading Advance Auto Parts




Markets Insider



Ticker: AAP

Earnings date: August 18

Implied earnings move: 8.6%

Historic move: 5.1%

Expectations gap: 3.6%

Source: Goldman Sachs

Options trading 5. Ross Stores

options trading Ross Stores




Markets Insider



Ticker: ROST

Earnings date: August 20

Implied earnings move: 6.5%

Historic move: 2.4%

Expectations gap: 4.1%

Source: Goldman Sachs

Options trading 4. BJ’s Wholesale

options trading BJ's Wholesale Club




Markets Insider



Ticker: BJ

Earnings date: August 24

Implied earnings move: 14.7%

Historic move: 9.0%

Expectations gap: 5.8%

Source: Goldman Sachs

Options trading 3. Gap

options trading Gap




Markets Insider



Ticker: GPS

Earnings date: August 20

Implied earnings move: 13.5%

Historic move: 7.1%

Expectations gap: 6.5%

Source: Goldman Sachs

Options trading 2. Urban Outfitters

options trading Urban Outfitters




Markets Insider



Ticker: URBN

Earnings date: August 25

Implied earnings move: 13.8%

Historic move: 6.9%

Expectations gap: 6.9%

Source: Goldman Sachs

Options trading 1. Kohl’s

options trading Kohl's




Markets Insider



Ticker: KSS

Earnings date: August 18

Implied earnings move: 15.5%

Historic move: 8.4%

Expectations gap: 7.1%

Source: Goldman Sachs

Get the latest Goldman Sachs stock price here.

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Options trading GOLDMAN SACHS: These 24 single-stock trades can help you make big returns in August as the pandemic creates a wildly unpredictable back-to-school season

Premium Justin Sullivan/Getty Images This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. The combination of earnings and back-to-school shopping makes August a historically bumpy month for retailers, according to Vishal Vivek of Goldman Sachs.This year, retailers face even more uncertainty because of questions about school openings during…

Options trading


Premium

options trading back to school shoppingoptions trading back to school shopping



Justin Sullivan/Getty Images


This story is available exclusively to Business Insider subscribers.
Become an Insider and start reading now.

  • The combination of earnings and back-to-school shopping makes August a historically bumpy month for retailers, according to Vishal Vivek of Goldman Sachs.
  • This year, retailers face even more uncertainty because of questions about school openings during the pandemic and the possibility of more economic relief from Congress.   
  • Despite that, Vivek said the options market seemed to expect less volatility than usual from many retailers that will report their earnings this month.
  • Click here to sign up for our weekly newsletter Investing Insider.
  • Visit Business Insider’s homepage for more stories.

Back-to-school season can be stressful in the best of years, and it turns out retailers feel the strain too.

Volatility for US retail stocks spikes during August thanks to the combination of back-to-school shopping and quarterly earnings, Vishal Vivek, Goldman’s equity-derivatives associate, said.

“The average stock in the XRT realizes 20% higher volatility in August relative to other months,” Vivek wrote in a note to clients, referring to the SPDR S&P Retail ETF.

To put it another way, he found that the volatility of those stocks in August over the past decade was double that of the average S&P 500 stock.

This year, that gap could be multiplied because of uncertainty over school openings and questions about whether Congress will pass a new economic-relief bill.

Despite all that, Vivek said the options market was pricing in less volatility for most of these stocks than they’ve recently delivered when they’ve reported their earnings.

That makes this a smart time to use an options-based strategy, he said. The opportunity he’s focused on involves betting on greater-than-expected volatility by buying September 20 straddles, or puts and calls with the same strike price.

“We see potential for higher than usual volatility in these names over the next month, driven by broadly elevated expectations, and an uncertain macro environment,” he wrote.

With that in mind, these 24 companies are all set to report earnings in August. They’re arranged from lowest to highest based on the difference between the volatility the options market is pricing in for the day and the size of the stock’s earnings-day moves over the past eight quarters.

For almost all of them, there is a substantial gap, suggesting that the options market is underestimating how much they could move.

Vivek added that earnings expectations looked high for Kohl’s, Urban Outfitters, and Gap, while positioning on Dollar General, Macy’s, and Nordstrom is notably bearish relative to history, and positioning on Target and Dollar Tree options is bullish.

Read more:

Options trading 24. Dollar Tree

options trading Dollar Tree




Markets Insider



Ticker: DLTR

Earnings date: August 27

Implied earnings move: 5.2%

Historic move: 7.8%

Expectations gap: -2.6%

Source: Goldman Sachs

Options trading 23. Target

options trading Target




Markets Insider



Ticker: TGT

Earnings date: August 19

Implied earnings move: 6.4%

Historic move: 8.4%

Expectations gap: -2.0%

Source: Goldman Sachs

Options trading 22. Dollar General

options trading Dollar General




Markets Insider



Ticker: DG

Earnings date: August 27

Implied earnings move: 5.7%

Historic move: 5.7%

Expectations gap: 0%

Source: Goldman Sachs

Options trading 21. Big Lots

options trading Big Lots




Markets Insider



Ticker: BIG

Earnings date: August 28

Implied earnings move: 12.2%

Historic move: 11.9%

Expectations gap: 0.3%

Source: Goldman Sachs

Options trading 20. Guess

options trading Guess




Markets Insider



Ticker: GES

Earnings date: August 26

Implied earnings move: 24.8%

Historic move: 24.5%

Expectations gap: 0.3%

Source: Goldman Sachs

Options trading 19. Best Buy

options trading Best Buy




Markets Insider



Ticker: BBY

Earnings date: August 25

Implied earnings move: 7.1%

Historic move: 6.6%

Expectations gap: 0.5%

Source: Goldman Sachs

Options trading 18. Ollie’s Bargain Outlet

options trading Ollie's Bargain Outlet




Markets Insider



Ticker: OLLI

Earnings date: August 27

Implied earnings move: 7.9%

Historic move: 6.9%

Expectations gap: 1.0%

Source: Goldman Sachs

Options trading 17. Abercrombie & Fitch

options trading Abercrombie & Fitch




Markets Insider



Ticker: ANF

Earnings date: August 27

Implied earnings move: 16.6%

Historic move: 15.3%

Expectations gap: 1.2%

Source: Goldman Sachs

Options trading 16. Walmart

options trading Walmart




Markets Insider



Ticker: WMT

Earnings date: August 18

Implied earnings move: 4.4%

Historic move: 3.1%

Expectations gap: 1.3%

Source: Goldman Sachs

Options trading 15. Five Below

options trading Five Below




Markets Insider



Ticker: FIVE

Earnings date: August 26

Implied earnings move: 7.5%

Historic move: 6.0%

Expectations gap: 1.5%

Source: Goldman Sachs

Options trading 14. Macy’s

options trading Macy's




Markets Insider



Ticker: M

Earnings date: August 12

Implied earnings move: 8.8%

Historic move: 7.1%

Expectations gap: 1.7%

Source: Goldman Sachs

Options trading 13. Nordstrom

options trading Nordstrom




Markets Insider



Ticker: JWN

Earnings date: August 19

Implied earnings move: 11.4%

Historic move: 9.5%

Expectations gap: 1.9%

Source: Goldman Sachs

Options trading 12. Ulta Beauty

options trading Ulta Beauty




Markets Insider



Ticker: ULTA

Earnings date: August 27

Implied earnings move: 11.%

Historic move: 9.1%

Expectations gap: 2.0%

Source: Goldman Sachs

Options trading 11. Burlington Stores

options trading Burlington Stores




Markets Insider



Ticker: BURL

Earnings date: August 27

Implied earnings move: 9.9%

Historic move:  7.7%

Expectations gap: 2.2%

Source: Goldman Sachs

Options trading 10. L Brands

options trading L Brands




Markets Insider



Ticker: LB

Earnings date: August 19

Implied earnings move: 12.5%

Historic move: 10.1%

Expectations gap: 2.4%

Source: Goldman Sachs

Options trading 9. TJX Cos.

options trading TJX




Markets Insider



Ticker: TJX

Earnings date: August 18

Implied earnings move: 6.3%

Historic move: 3.7%

Expectations gap: 2.7%

Source: Goldman Sachs

Options trading 7. Dick’s Sporting Goods

options trading Dick's Sporting Goods




Markets Insider



Ticker: DKS

Earnings date: August 26

Implied earnings move: 9.4%

Historic move: 6.4%

Expectations gap: 2.9%

Source: Goldman Sachs

Real Life. Real News. Real Voices

Help us tell more of the stories that matter

Become a founding member

Options trading 6. Advance Auto Parts

options trading Advance Auto Parts




Markets Insider



Ticker: AAP

Earnings date: August 18

Implied earnings move: 8.6%

Historic move: 5.1%

Expectations gap: 3.6%

Source: Goldman Sachs

Options trading 5. Ross Stores

options trading Ross Stores




Markets Insider



Ticker: ROST

Earnings date: August 20

Implied earnings move: 6.5%

Historic move: 2.4%

Expectations gap: 4.1%

Source: Goldman Sachs

Options trading 4. BJ’s Wholesale

options trading BJ's Wholesale Club




Markets Insider



Ticker: BJ

Earnings date: August 24

Implied earnings move: 14.7%

Historic move: 9.0%

Expectations gap: 5.8%

Source: Goldman Sachs

Options trading 3. Gap

options trading Gap




Markets Insider



Ticker: GPS

Earnings date: August 20

Implied earnings move: 13.5%

Historic move: 7.1%

Expectations gap: 6.5%

Source: Goldman Sachs

Options trading 2. Urban Outfitters

options trading Urban Outfitters




Markets Insider



Ticker: URBN

Earnings date: August 25

Implied earnings move: 13.8%

Historic move: 6.9%

Expectations gap: 6.9%

Source: Goldman Sachs

Options trading 1. Kohl’s

options trading Kohl's




Markets Insider



Ticker: KSS

Earnings date: August 18

Implied earnings move: 15.5%

Historic move: 8.4%

Expectations gap: 7.1%

Source: Goldman Sachs

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Uncategorized

Options trading GOLDMAN SACHS: These 24 single-stock trades can help you make big returns in August as the pandemic creates a wildly unpredictable back-to-school season

Premium Justin Sullivan/Getty Images This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. The combination of earnings and back-to-school shopping makes August a historically bumpy month for retailers, according to Vishal Vivek of Goldman Sachs.This year, retailers face even more uncertainty because of questions about school openings during…

Options trading


Premium

options trading back to school shoppingoptions trading back to school shopping



Justin Sullivan/Getty Images


This story is available exclusively to Business Insider subscribers.
Become an Insider and start reading now.

  • The combination of earnings and back-to-school shopping makes August a historically bumpy month for retailers, according to Vishal Vivek of Goldman Sachs.
  • This year, retailers face even more uncertainty because of questions about school openings during the pandemic and the possibility of more economic relief from Congress.   
  • Despite that, Vivek said the options market seemed to expect less volatility than usual from many retailers that will report their earnings this month.
  • Click here to sign up for our weekly newsletter Investing Insider.
  • Visit Business Insider’s homepage for more stories.

Back-to-school season can be stressful in the best of years, and it turns out retailers feel the strain too.

Volatility for US retail stocks spikes during August thanks to the combination of back-to-school shopping and quarterly earnings, Vishal Vivek, Goldman’s equity-derivatives associate, said.

“The average stock in the XRT realizes 20% higher volatility in August relative to other months,” Vivek wrote in a note to clients, referring to the SPDR S&P Retail ETF.

To put it another way, he found that the volatility of those stocks in August over the past decade was double that of the average S&P 500 stock.

This year, that gap could be multiplied because of uncertainty over school openings and questions about whether Congress will pass a new economic-relief bill.

Despite all that, Vivek said the options market was pricing in less volatility for most of these stocks than they’ve recently delivered when they’ve reported their earnings.

That makes this a smart time to use an options-based strategy, he said. The opportunity he’s focused on involves betting on greater-than-expected volatility by buying September 20 straddles, or puts and calls with the same strike price.

“We see potential for higher than usual volatility in these names over the next month, driven by broadly elevated expectations, and an uncertain macro environment,” he wrote.

With that in mind, these 24 companies are all set to report earnings in August. They’re arranged from lowest to highest based on the difference between the volatility the options market is pricing in for the day and the size of the stock’s earnings-day moves over the past eight quarters.

For almost all of them, there is a substantial gap, suggesting that the options market is underestimating how much they could move.

Vivek added that earnings expectations looked high for Kohl’s, Urban Outfitters, and Gap, while positioning on Dollar General, Macy’s, and Nordstrom is notably bearish relative to history, and positioning on Target and Dollar Tree options is bullish.

Read more:

Options trading 24. Dollar Tree

options trading Dollar Tree




Markets Insider



Ticker: DLTR

Earnings date: August 27

Implied earnings move: 5.2%

Historic move: 7.8%

Expectations gap: -2.6%

Source: Goldman Sachs

Options trading 23. Target

options trading Target




Markets Insider



Ticker: TGT

Earnings date: August 19

Implied earnings move: 6.4%

Historic move: 8.4%

Expectations gap: -2.0%

Source: Goldman Sachs

Options trading 22. Dollar General

options trading Dollar General




Markets Insider



Ticker: DG

Earnings date: August 27

Implied earnings move: 5.7%

Historic move: 5.7%

Expectations gap: 0%

Source: Goldman Sachs

Options trading 21. Big Lots

options trading Big Lots




Markets Insider



Ticker: BIG

Earnings date: August 28

Implied earnings move: 12.2%

Historic move: 11.9%

Expectations gap: 0.3%

Source: Goldman Sachs

Options trading 20. Guess

options trading Guess




Markets Insider



Ticker: GES

Earnings date: August 26

Implied earnings move: 24.8%

Historic move: 24.5%

Expectations gap: 0.3%

Source: Goldman Sachs

Options trading 19. Best Buy

options trading Best Buy




Markets Insider



Ticker: BBY

Earnings date: August 25

Implied earnings move: 7.1%

Historic move: 6.6%

Expectations gap: 0.5%

Source: Goldman Sachs

Options trading 18. Ollie’s Bargain Outlet

options trading Ollie's Bargain Outlet




Markets Insider



Ticker: OLLI

Earnings date: August 27

Implied earnings move: 7.9%

Historic move: 6.9%

Expectations gap: 1.0%

Source: Goldman Sachs

Options trading 17. Abercrombie & Fitch

options trading Abercrombie & Fitch




Markets Insider



Ticker: ANF

Earnings date: August 27

Implied earnings move: 16.6%

Historic move: 15.3%

Expectations gap: 1.2%

Source: Goldman Sachs

Options trading 16. Walmart

options trading Walmart




Markets Insider



Ticker: WMT

Earnings date: August 18

Implied earnings move: 4.4%

Historic move: 3.1%

Expectations gap: 1.3%

Source: Goldman Sachs

Options trading 15. Five Below

options trading Five Below




Markets Insider



Ticker: FIVE

Earnings date: August 26

Implied earnings move: 7.5%

Historic move: 6.0%

Expectations gap: 1.5%

Source: Goldman Sachs

Options trading 14. Macy’s

options trading Macy's




Markets Insider



Ticker: M

Earnings date: August 12

Implied earnings move: 8.8%

Historic move: 7.1%

Expectations gap: 1.7%

Source: Goldman Sachs

Options trading 13. Nordstrom

options trading Nordstrom




Markets Insider



Ticker: JWN

Earnings date: August 19

Implied earnings move: 11.4%

Historic move: 9.5%

Expectations gap: 1.9%

Source: Goldman Sachs

Options trading 12. Ulta Beauty

options trading Ulta Beauty




Markets Insider



Ticker: ULTA

Earnings date: August 27

Implied earnings move: 11.%

Historic move: 9.1%

Expectations gap: 2.0%

Source: Goldman Sachs

Options trading 11. Burlington Stores

options trading Burlington Stores




Markets Insider



Ticker: BURL

Earnings date: August 27

Implied earnings move: 9.9%

Historic move:  7.7%

Expectations gap: 2.2%

Source: Goldman Sachs

Options trading 10. L Brands

options trading L Brands




Markets Insider



Ticker: LB

Earnings date: August 19

Implied earnings move: 12.5%

Historic move: 10.1%

Expectations gap: 2.4%

Source: Goldman Sachs

Options trading 9. TJX Cos.

options trading TJX




Markets Insider



Ticker: TJX

Earnings date: August 18

Implied earnings move: 6.3%

Historic move: 3.7%

Expectations gap: 2.7%

Source: Goldman Sachs

Options trading 7. Dick’s Sporting Goods

options trading Dick's Sporting Goods




Markets Insider



Ticker: DKS

Earnings date: August 26

Implied earnings move: 9.4%

Historic move: 6.4%

Expectations gap: 2.9%

Source: Goldman Sachs

Real Life. Real News. Real Voices

Help us tell more of the stories that matter

Become a founding member

Options trading 6. Advance Auto Parts

options trading Advance Auto Parts




Markets Insider



Ticker: AAP

Earnings date: August 18

Implied earnings move: 8.6%

Historic move: 5.1%

Expectations gap: 3.6%

Source: Goldman Sachs

Options trading 5. Ross Stores

options trading Ross Stores




Markets Insider



Ticker: ROST

Earnings date: August 20

Implied earnings move: 6.5%

Historic move: 2.4%

Expectations gap: 4.1%

Source: Goldman Sachs

Options trading 4. BJ’s Wholesale

options trading BJ's Wholesale Club




Markets Insider



Ticker: BJ

Earnings date: August 24

Implied earnings move: 14.7%

Historic move: 9.0%

Expectations gap: 5.8%

Source: Goldman Sachs

Options trading 3. Gap

options trading Gap




Markets Insider



Ticker: GPS

Earnings date: August 20

Implied earnings move: 13.5%

Historic move: 7.1%

Expectations gap: 6.5%

Source: Goldman Sachs

Options trading 2. Urban Outfitters

options trading Urban Outfitters




Markets Insider



Ticker: URBN

Earnings date: August 25

Implied earnings move: 13.8%

Historic move: 6.9%

Expectations gap: 6.9%

Source: Goldman Sachs

Options trading 1. Kohl’s

options trading Kohl's




Markets Insider



Ticker: KSS

Earnings date: August 18

Implied earnings move: 15.5%

Historic move: 8.4%

Expectations gap: 7.1%

Source: Goldman Sachs

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BI Prime
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Uncategorized

Options trading GOLDMAN SACHS: These 24 single-stock trades can help you make big returns in August as the pandemic creates a wildly unpredictable back-to-school season

Premium Justin Sullivan/Getty Images This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. The combination of earnings and back-to-school shopping makes August a historically bumpy month for retailers, according to Vishal Vivek of Goldman Sachs.This year, retailers face even more uncertainty because of questions about school openings during…

Options trading


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options trading back to school shoppingoptions trading back to school shopping



Justin Sullivan/Getty Images


This story is available exclusively to Business Insider subscribers.
Become an Insider and start reading now.

  • The combination of earnings and back-to-school shopping makes August a historically bumpy month for retailers, according to Vishal Vivek of Goldman Sachs.
  • This year, retailers face even more uncertainty because of questions about school openings during the pandemic and the possibility of more economic relief from Congress.   
  • Despite that, Vivek said the options market seemed to expect less volatility than usual from many retailers that will report their earnings this month.
  • Click here to sign up for our weekly newsletter Investing Insider.
  • Visit Business Insider’s homepage for more stories.

Back-to-school season can be stressful in the best of years, and it turns out retailers feel the strain too.

Volatility for US retail stocks spikes during August thanks to the combination of back-to-school shopping and quarterly earnings, Vishal Vivek, Goldman’s equity-derivatives associate, said.

“The average stock in the XRT realizes 20% higher volatility in August relative to other months,” Vivek wrote in a note to clients, referring to the SPDR S&P Retail ETF.

To put it another way, he found that the volatility of those stocks in August over the past decade was double that of the average S&P 500 stock.

This year, that gap could be multiplied because of uncertainty over school openings and questions about whether Congress will pass a new economic-relief bill.

Despite all that, Vivek said the options market was pricing in less volatility for most of these stocks than they’ve recently delivered when they’ve reported their earnings.

That makes this a smart time to use an options-based strategy, he said. The opportunity he’s focused on involves betting on greater-than-expected volatility by buying September 20 straddles, or puts and calls with the same strike price.

“We see potential for higher than usual volatility in these names over the next month, driven by broadly elevated expectations, and an uncertain macro environment,” he wrote.

With that in mind, these 24 companies are all set to report earnings in August. They’re arranged from lowest to highest based on the difference between the volatility the options market is pricing in for the day and the size of the stock’s earnings-day moves over the past eight quarters.

For almost all of them, there is a substantial gap, suggesting that the options market is underestimating how much they could move.

Vivek added that earnings expectations looked high for Kohl’s, Urban Outfitters, and Gap, while positioning on Dollar General, Macy’s, and Nordstrom is notably bearish relative to history, and positioning on Target and Dollar Tree options is bullish.

Read more:

Options trading 24. Dollar Tree

options trading Dollar Tree




Markets Insider



Ticker: DLTR

Earnings date: August 27

Implied earnings move: 5.2%

Historic move: 7.8%

Expectations gap: -2.6%

Source: Goldman Sachs

Options trading 23. Target

options trading Target




Markets Insider



Ticker: TGT

Earnings date: August 19

Implied earnings move: 6.4%

Historic move: 8.4%

Expectations gap: -2.0%

Source: Goldman Sachs

Options trading 22. Dollar General

options trading Dollar General




Markets Insider



Ticker: DG

Earnings date: August 27

Implied earnings move: 5.7%

Historic move: 5.7%

Expectations gap: 0%

Source: Goldman Sachs

Options trading 21. Big Lots

options trading Big Lots




Markets Insider



Ticker: BIG

Earnings date: August 28

Implied earnings move: 12.2%

Historic move: 11.9%

Expectations gap: 0.3%

Source: Goldman Sachs

Options trading 20. Guess

options trading Guess




Markets Insider



Ticker: GES

Earnings date: August 26

Implied earnings move: 24.8%

Historic move: 24.5%

Expectations gap: 0.3%

Source: Goldman Sachs

Options trading 19. Best Buy

options trading Best Buy




Markets Insider



Ticker: BBY

Earnings date: August 25

Implied earnings move: 7.1%

Historic move: 6.6%

Expectations gap: 0.5%

Source: Goldman Sachs

Options trading 18. Ollie’s Bargain Outlet

options trading Ollie's Bargain Outlet




Markets Insider



Ticker: OLLI

Earnings date: August 27

Implied earnings move: 7.9%

Historic move: 6.9%

Expectations gap: 1.0%

Source: Goldman Sachs

Options trading 17. Abercrombie & Fitch

options trading Abercrombie & Fitch




Markets Insider



Ticker: ANF

Earnings date: August 27

Implied earnings move: 16.6%

Historic move: 15.3%

Expectations gap: 1.2%

Source: Goldman Sachs

Options trading 16. Walmart

options trading Walmart




Markets Insider



Ticker: WMT

Earnings date: August 18

Implied earnings move: 4.4%

Historic move: 3.1%

Expectations gap: 1.3%

Source: Goldman Sachs

Options trading 15. Five Below

options trading Five Below




Markets Insider



Ticker: FIVE

Earnings date: August 26

Implied earnings move: 7.5%

Historic move: 6.0%

Expectations gap: 1.5%

Source: Goldman Sachs

Options trading 14. Macy’s

options trading Macy's




Markets Insider



Ticker: M

Earnings date: August 12

Implied earnings move: 8.8%

Historic move: 7.1%

Expectations gap: 1.7%

Source: Goldman Sachs

Options trading 13. Nordstrom

options trading Nordstrom




Markets Insider



Ticker: JWN

Earnings date: August 19

Implied earnings move: 11.4%

Historic move: 9.5%

Expectations gap: 1.9%

Source: Goldman Sachs

Options trading 12. Ulta Beauty

options trading Ulta Beauty




Markets Insider



Ticker: ULTA

Earnings date: August 27

Implied earnings move: 11.%

Historic move: 9.1%

Expectations gap: 2.0%

Source: Goldman Sachs

Options trading 11. Burlington Stores

options trading Burlington Stores




Markets Insider



Ticker: BURL

Earnings date: August 27

Implied earnings move: 9.9%

Historic move:  7.7%

Expectations gap: 2.2%

Source: Goldman Sachs

Options trading 10. L Brands

options trading L Brands




Markets Insider



Ticker: LB

Earnings date: August 19

Implied earnings move: 12.5%

Historic move: 10.1%

Expectations gap: 2.4%

Source: Goldman Sachs

Options trading 9. TJX Cos.

options trading TJX




Markets Insider



Ticker: TJX

Earnings date: August 18

Implied earnings move: 6.3%

Historic move: 3.7%

Expectations gap: 2.7%

Source: Goldman Sachs

Options trading 7. Dick’s Sporting Goods

options trading Dick's Sporting Goods




Markets Insider



Ticker: DKS

Earnings date: August 26

Implied earnings move: 9.4%

Historic move: 6.4%

Expectations gap: 2.9%

Source: Goldman Sachs

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Help us tell more of the stories that matter

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Options trading 6. Advance Auto Parts

options trading Advance Auto Parts




Markets Insider



Ticker: AAP

Earnings date: August 18

Implied earnings move: 8.6%

Historic move: 5.1%

Expectations gap: 3.6%

Source: Goldman Sachs

Options trading 5. Ross Stores

options trading Ross Stores




Markets Insider



Ticker: ROST

Earnings date: August 20

Implied earnings move: 6.5%

Historic move: 2.4%

Expectations gap: 4.1%

Source: Goldman Sachs

Options trading 4. BJ’s Wholesale

options trading BJ's Wholesale Club




Markets Insider



Ticker: BJ

Earnings date: August 24

Implied earnings move: 14.7%

Historic move: 9.0%

Expectations gap: 5.8%

Source: Goldman Sachs

Options trading 3. Gap

options trading Gap




Markets Insider



Ticker: GPS

Earnings date: August 20

Implied earnings move: 13.5%

Historic move: 7.1%

Expectations gap: 6.5%

Source: Goldman Sachs

Options trading 2. Urban Outfitters

options trading Urban Outfitters




Markets Insider



Ticker: URBN

Earnings date: August 25

Implied earnings move: 13.8%

Historic move: 6.9%

Expectations gap: 6.9%

Source: Goldman Sachs

Options trading 1. Kohl’s

options trading Kohl's




Markets Insider



Ticker: KSS

Earnings date: August 18

Implied earnings move: 15.5%

Historic move: 8.4%

Expectations gap: 7.1%

Source: Goldman Sachs

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Uncategorized

Options trading GOLDMAN SACHS: These 24 single-stock trades can help you make big returns in August as the pandemic creates a wildly unpredictable back-to-school season

Premium Justin Sullivan/Getty Images This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. The combination of earnings and back-to-school shopping makes August a historically bumpy month for retailers, according to Vishal Vivek of Goldman Sachs.This year, retailers face even more uncertainty because of questions about school openings during…

Options trading


Premium

options trading back to school shoppingoptions trading back to school shopping



Justin Sullivan/Getty Images


This story is available exclusively to Business Insider subscribers.
Become an Insider and start reading now.

  • The combination of earnings and back-to-school shopping makes August a historically bumpy month for retailers, according to Vishal Vivek of Goldman Sachs.
  • This year, retailers face even more uncertainty because of questions about school openings during the pandemic and the possibility of more economic relief from Congress.   
  • Despite that, Vivek said the options market seemed to expect less volatility than usual from many retailers that will report their earnings this month.
  • Click here to sign up for our weekly newsletter Investing Insider.
  • Visit Business Insider’s homepage for more stories.

Back-to-school season can be stressful in the best of years, and it turns out retailers feel the strain too.

Volatility for US retail stocks spikes during August thanks to the combination of back-to-school shopping and quarterly earnings, Vishal Vivek, Goldman’s equity-derivatives associate, said.

“The average stock in the XRT realizes 20% higher volatility in August relative to other months,” Vivek wrote in a note to clients, referring to the SPDR S&P Retail ETF.

To put it another way, he found that the volatility of those stocks in August over the past decade was double that of the average S&P 500 stock.

This year, that gap could be multiplied because of uncertainty over school openings and questions about whether Congress will pass a new economic-relief bill.

Despite all that, Vivek said the options market was pricing in less volatility for most of these stocks than they’ve recently delivered when they’ve reported their earnings.

That makes this a smart time to use an options-based strategy, he said. The opportunity he’s focused on involves betting on greater-than-expected volatility by buying September 20 straddles, or puts and calls with the same strike price.

“We see potential for higher than usual volatility in these names over the next month, driven by broadly elevated expectations, and an uncertain macro environment,” he wrote.

With that in mind, these 24 companies are all set to report earnings in August. They’re arranged from lowest to highest based on the difference between the volatility the options market is pricing in for the day and the size of the stock’s earnings-day moves over the past eight quarters.

For almost all of them, there is a substantial gap, suggesting that the options market is underestimating how much they could move.

Vivek added that earnings expectations looked high for Kohl’s, Urban Outfitters, and Gap, while positioning on Dollar General, Macy’s, and Nordstrom is notably bearish relative to history, and positioning on Target and Dollar Tree options is bullish.

Read more:

Options trading 24. Dollar Tree

options trading Dollar Tree




Markets Insider



Ticker: DLTR

Earnings date: August 27

Implied earnings move: 5.2%

Historic move: 7.8%

Expectations gap: -2.6%

Source: Goldman Sachs

Options trading 23. Target

options trading Target




Markets Insider



Ticker: TGT

Earnings date: August 19

Implied earnings move: 6.4%

Historic move: 8.4%

Expectations gap: -2.0%

Source: Goldman Sachs

Options trading 22. Dollar General

options trading Dollar General




Markets Insider



Ticker: DG

Earnings date: August 27

Implied earnings move: 5.7%

Historic move: 5.7%

Expectations gap: 0%

Source: Goldman Sachs

Options trading 21. Big Lots

options trading Big Lots




Markets Insider



Ticker: BIG

Earnings date: August 28

Implied earnings move: 12.2%

Historic move: 11.9%

Expectations gap: 0.3%

Source: Goldman Sachs

Options trading 20. Guess

options trading Guess




Markets Insider



Ticker: GES

Earnings date: August 26

Implied earnings move: 24.8%

Historic move: 24.5%

Expectations gap: 0.3%

Source: Goldman Sachs

Options trading 19. Best Buy

options trading Best Buy




Markets Insider



Ticker: BBY

Earnings date: August 25

Implied earnings move: 7.1%

Historic move: 6.6%

Expectations gap: 0.5%

Source: Goldman Sachs

Options trading 18. Ollie’s Bargain Outlet

options trading Ollie's Bargain Outlet




Markets Insider



Ticker: OLLI

Earnings date: August 27

Implied earnings move: 7.9%

Historic move: 6.9%

Expectations gap: 1.0%

Source: Goldman Sachs

Options trading 17. Abercrombie & Fitch

options trading Abercrombie & Fitch




Markets Insider



Ticker: ANF

Earnings date: August 27

Implied earnings move: 16.6%

Historic move: 15.3%

Expectations gap: 1.2%

Source: Goldman Sachs

Options trading 16. Walmart

options trading Walmart




Markets Insider



Ticker: WMT

Earnings date: August 18

Implied earnings move: 4.4%

Historic move: 3.1%

Expectations gap: 1.3%

Source: Goldman Sachs

Options trading 15. Five Below

options trading Five Below




Markets Insider



Ticker: FIVE

Earnings date: August 26

Implied earnings move: 7.5%

Historic move: 6.0%

Expectations gap: 1.5%

Source: Goldman Sachs

Options trading 14. Macy’s

options trading Macy's




Markets Insider



Ticker: M

Earnings date: August 12

Implied earnings move: 8.8%

Historic move: 7.1%

Expectations gap: 1.7%

Source: Goldman Sachs

Options trading 13. Nordstrom

options trading Nordstrom




Markets Insider



Ticker: JWN

Earnings date: August 19

Implied earnings move: 11.4%

Historic move: 9.5%

Expectations gap: 1.9%

Source: Goldman Sachs

Options trading 12. Ulta Beauty

options trading Ulta Beauty




Markets Insider



Ticker: ULTA

Earnings date: August 27

Implied earnings move: 11.%

Historic move: 9.1%

Expectations gap: 2.0%

Source: Goldman Sachs

Options trading 11. Burlington Stores

options trading Burlington Stores




Markets Insider



Ticker: BURL

Earnings date: August 27

Implied earnings move: 9.9%

Historic move:  7.7%

Expectations gap: 2.2%

Source: Goldman Sachs

Options trading 10. L Brands

options trading L Brands




Markets Insider



Ticker: LB

Earnings date: August 19

Implied earnings move: 12.5%

Historic move: 10.1%

Expectations gap: 2.4%

Source: Goldman Sachs

Options trading 9. TJX Cos.

options trading TJX




Markets Insider



Ticker: TJX

Earnings date: August 18

Implied earnings move: 6.3%

Historic move: 3.7%

Expectations gap: 2.7%

Source: Goldman Sachs

Options trading 7. Dick’s Sporting Goods

options trading Dick's Sporting Goods




Markets Insider



Ticker: DKS

Earnings date: August 26

Implied earnings move: 9.4%

Historic move: 6.4%

Expectations gap: 2.9%

Source: Goldman Sachs

Real Life. Real News. Real Voices

Help us tell more of the stories that matter

Become a founding member

Options trading 6. Advance Auto Parts

options trading Advance Auto Parts




Markets Insider



Ticker: AAP

Earnings date: August 18

Implied earnings move: 8.6%

Historic move: 5.1%

Expectations gap: 3.6%

Source: Goldman Sachs

Options trading 5. Ross Stores

options trading Ross Stores




Markets Insider



Ticker: ROST

Earnings date: August 20

Implied earnings move: 6.5%

Historic move: 2.4%

Expectations gap: 4.1%

Source: Goldman Sachs

Options trading 4. BJ’s Wholesale

options trading BJ's Wholesale Club




Markets Insider



Ticker: BJ

Earnings date: August 24

Implied earnings move: 14.7%

Historic move: 9.0%

Expectations gap: 5.8%

Source: Goldman Sachs

Options trading 3. Gap

options trading Gap




Markets Insider



Ticker: GPS

Earnings date: August 20

Implied earnings move: 13.5%

Historic move: 7.1%

Expectations gap: 6.5%

Source: Goldman Sachs

Options trading 2. Urban Outfitters

options trading Urban Outfitters




Markets Insider



Ticker: URBN

Earnings date: August 25

Implied earnings move: 13.8%

Historic move: 6.9%

Expectations gap: 6.9%

Source: Goldman Sachs

Options trading 1. Kohl’s

options trading Kohl's




Markets Insider



Ticker: KSS

Earnings date: August 18

Implied earnings move: 15.5%

Historic move: 8.4%

Expectations gap: 7.1%

Source: Goldman Sachs

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Investing
BI Prime
Features
Goldman Sachs

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