Goldman Sachs has its eyes on a particular trading strategy that could be a winner in the final weeks of 2024. The Wall Street investment bank advises buying call options — a contract to purchase stock at a specific strike price at a set expiration time – five days before a company’s analyst day and selling the options back into the market one day later. The strategy has earned an 18% return on premium, on average over the past 20 years, Goldman says. “We see analyst day information content as significant as company managements take the opportunity to review recent performance, lay out strategic priorities, provide/update forward guidance, reveal long-term targets etc.,” Goldman Sachs head of derivatives research John Marshall wrote last week. “Despite the significance of analyst days, the options market tends to underprice volatility around analyst days.” Goldman highlighted 16 potential opportunities surrounding December analyst days in stocks ranging from Robinhood to GE Vernova to Match Group . Robinhood will host its first ever investor day on Dec. 4. Marshall wrote that the the bank is looking for Robinhood executives to provide details of its view of the cryptocurrency market in the future, especially given President-elect Donald Trump’s embrace of digital currencies. Goldman will listen in particular for for commentary on how Robinhood will participate in an expanding cryptocurrency ecosystem amid loosening government regulations. HOOD YTD mountain Robinhood stock. Marshall noted that Robinhood stock has a two-week implied volatility of 69, which is in its 78th percentile relative to the past year. Ahead of an expected uptick in volatility before Robinhood’s investor day, Goldman recommends buying the Dec. 6 call options on the stock with a $36.50 strike. Shares of the trading platform have advanced 195% in 2024. Investors should also consider call options on GE Vernova ahead of its Dec. 10 investor day, Goldman said. Details on the power equipment company’s new segment level targets for 2028, and how it stands to benefit from the budding energy transition are likely. Analyst Joe Ritchie remains optimistic that GE Vernova’s strength in its core businesses, power and electrification, can more than offset any headwinds tied to expanding its offshore wind business. GEV YTD mountain GE Vernova stock. Goldman recommends buying GE Vernova Dec. 13 call options with a $340 strike price. GE Vernova’s implied one-month volatility of 49 is about seven points below its one-month realized volatility of 56, the investment bank said. Goldman is also eyeing Match Group calls. Analyst Eric Sheridan figures the online dating platform’s first ever investor day on Dec. 11 will offer insight into how Match plans to address user acquisition and future growth, which were notable headwinds in the company’s most recent earnings report. Stock in the Tinder parent has fallen more than 10% in 2024. MTCH YTD mountain Match Group stock. Goldman recommends buying Dec. 13 calls on Match with a strike price of $33. Match stock has a one-month implied volatility of 38, in the 78th percentile compared to the past year.
Goldman trading strategy aims to score a few big wins before year end