Goldman Sachs Suggests Buying Straddles on MetroPCS Communications

Goldman Sachs is out with a research report this morning, where it suggests that traders buy straddles of MetroPCS Communications PCS ahead of its subscriber update Goldman Sachs Telecommunications analyst Jason Armstrong expects PCS to update their 4Q quarterly subscriber adds in the first week of January, consistent with the past three years. Over the past three years of subscriber estimates updates, PCS shares have been very volatile, with an average move of +/-12% (day before update to two days after). This is more volatility than we typically see on earnings (median 8Q move of +/-6.8%). The analysts suggest buying the Jan2012 $8 straddle for $0.86. MetroPCS Communications, Inc. is a wireless telecommunications provider in the United States measured by the number of subscribers served.