Skip to main content

Market Overview

Goldman Says Apple, Seagate And Visa Options Are Underpricing Earnings Alpha


Traders could be overlooking several golden earnings-related trading opportunities. Goldman Sachs analyst Katherine Fogertey sees five specific option trading strategies that should work this earnings season.

“The low expectations for earnings moves combined with the fact that stocks have been moving more and more on earnings vs the non-earnings period paints a very favorable picture for owning options around earnings,” she explains.

Related Link: Wall Street Firm Bullish On Airlines, Ups Estimates And Price Targets

Here are the trades Fogertey recommends:

1. A Sothebys (NYSE: BID) straddle with May expiration captures two catalysts: the May Contemporary and Impressionist evening auction and Q1 earnings.

2. Buying Seagate Technology PLC (NASDAQ: STX) puts hedges against the downside risk to earnings that Goldman analysts fear.

3. Buying Visa Inc (NYSE: V) calls is a play on Goldman’s expectations that low end spending and lower gas prices will drive a Q1 earnings beat.

4. Buying Apple Inc. (NASDAQ: AAPL) calls provides exposure to Goldman’s belief that Q1 demand and earnings will be better than expected.

5. Buying TransDigm Group Incorporated (NYSE: TDG) calls is a play on Goldman’s expectation that the company will report strong earnings in the face of a guarded options market and elevated short interest.

Fogertey notes the rationale behind these five trades is that the options market is pricing in very little earnings-related volatility, and Goldman’s estimates are well outside of consensus expectations.

Disclosure: the author holds no position in the stocks mentioned.

Latest Ratings for BID

Jan 2019Cowen & Co.DowngradesOutperformMarket Perform
Nov 2018Sidoti & Co.UpgradesNeutralBuy
Mar 2018Cowen & Co.MaintainsOutperformOutperform

View More Analyst Ratings for BID
View the Latest Analyst Ratings


Related Articles (BID + V)

View Comments and Join the Discussion!

Posted-In: Goldman Sachs Katherine FogerteyAnalyst Color Options Markets Analyst Ratings Trading Ideas

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at