Goldman Sachs Recommends 28 Put Options to Hedge Pullback (FSLR) (MOS) (CELG) (BSX) (DE)
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In a research note Thursday, Goldman Sachs analyst John Marshall recommended puts on 28 sell-rated stock with low put prices. The recommendation was made for investors looking to protect their portfolio in the event the recent market weakness accelerates into a summer sell-off.
"We favor buying Oct puts as they are likely to see an increase in value not just because of a short term stock price move, but also due to a potential rise in implied volatility. This rise in implied vol could benefit put buyers even if a sell-off was moderate or fleeting. Time decay on a 3-mo option is substantially less in the near term than with a 1-mo option. Oct options could benefit from the seasonality of volatility (vol has historically picked up in Sept/Oct). For stocks without Oct puts, we favor Sept/Nov," said Marshall.
Stocks with high options liquidity include:
- First Solar (NASDAQ: FSLR)
- Mosaic Company (NYSE: MOS)
- Celgene (NASDAQ: CELG)
- Boston Scientific Corp. (NYSE: BSX)
- Deere & Company (NYSE: DE)
- C.H. Robinson Worldwide, Inc. (NASDAQ: CHRW)
- SUPERVALU INC. (NYSE: SVU)
- Advanced Micro Devices (NYSE: AMD)
- Denbury Resources, Inc. (NYSE: DNR)
- Clorox Co. (NYSE: CLX)
Stocks with medium options liquidity include:
- Hovnanian Enterprises Inc. (NYSE: HOV)
- Boyd Gaming Corp. (NYSE: BYD)
- Pinnacle Entertainment, Inc. (NYSE: PNK)
- Airgas, Inc. (NYSE: ARG)
- Schnitzer Steel Industries, Inc. (NASDAQ: SCHN)
- Sigma-Aldrich (NASDAQ: SIAL)
- QLogic Corp (NASDAQ: QLGC)
- W.W. Grainger, Inc. (NYSE: GWW)
- Discovery Communications Inc Series A (NASDAQ: DISCA)
- Hershey Foods Corp. (NYSE: HSY)
- Public Storage (NYSE: PSA)
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