MT Insider: Options Prices At Record Lows, According to Goldman Sachs; Tactical Calls Include MON, STZ, STT and IBM


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According to a report out today, Goldman Sachs believes that equity option prices are at record lows with investors currently pricing in an environment of low volatility and low correlation despite uncertainty ahead of earnings season and fiscal issues for the federal government.

It is worth noting that much of the overhang previously pressuring the markets, including the crisis in Syria, the German elections and the decision by the Federal Open Markets Committee against tapering, have since been resolved.

Assuming continued easy monetary policy and improving gross domestic product, Goldman recommends buying calls ahead of earnings for the following stocks: Monsanto ( MON ), Constellation Brands ( STZ ), State Street Corp ( STT ) and International Business Machines ( IBM ).

Moreover, the analyst believes options that are under-pricing growth catalysts include: Palo Alto Networks ( PANW ), Groupon Inc. (GRPN), ASML Holding (ASML), Mylan Inc (MYL), Inc (SOHU) and Universal Display Corp (OLED).

Separately, GS is bullish on calls for Eli Lilly and Co (LLY), Accenture (ACN), and Moody's Corp (MCO) prior to their upcoming analyst days.

MON 106.07 +0.02 +0.02

STZ 57.25 +0.01 +0.02

STT 66.73 -0.91 -1.35

IBM 192 +2.06 +1.09

PANW 48.44 -0.55 -1.12

GRPN 12.04 -0.60 -4.75

ASML 96.65 -0.82 -0.84

MYL 38.12 -0.54 -1.38

SOHU 72.00 -0.06 -0.08

OLED 31.42 -1.09 -3.35

LLY 53.08 -0.85 -1.58

ACN 76.71 -0.61 -0.79

MCO 70.15 -0.45 -0.64

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing , Commodities
More Headlines for: IBM , MON , PANW , STT , STZ

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