Goldman Sachs Suggests Buying Puts on Industrials

Goldman Sachs is out with a research note this morning, where it suggests that traders buy puts on The XLI

, 3M

, and Boeing

. Goldman's analysts noted that options prices across US stocks have fallen sharply over the past two months as US economic data has improved and the LTRO reduced contagion fears. Given their global strategists' continued caution and the below consensus estimates of their stock analysts, GS believe options prices have dropped too far, too fast and prudent investors should buy options to hedge earnings season. The analysts suggest buying the Feb2012 $35 puts on the XLI for $0.89, the Feb2012 $80 puts on MMM for $1.20, and the Feb2012 $72.50 puts on BA for $1.63. 3M Company is a diversified technology company with a presence in industrial and transportation; health care; display and graphics; consumer and office; safety, security and protection services, and electro and communications. The Boeing Company is an aerospace company. Boeing is engaged in the design, development, manufacture, sale and support of commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services.