Options Traders Bullish on Bank Stock Before Earnings

Shares have failed to conquer $350 twice this year

Digital Content Manager
Jul 13, 2023 at 2:35 PM
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Goldman Sachs Group Inc (NYSE:GS) is among the bank names that will announce second-quarter earnings next week, with its report slated for release before the open on Wednesday, July 19. The security is down 4.5% in 2023, and has tested a floor near the $310 area after two failed attempts to conquer the $350 level in May and July. Shares were last seen up 0.4% at $327.73, and still sport a 13% year-over-year lead.

GS Intraday

The bank stock has a lackluster post-earnings track record, finishing five of its last eight next-day sessions lower, including a 6.4% dip in January. GS averaged a move of 3.1% over the past two years, regardless of direction, but this time the options pits are pricing in a bigger-than-usual move of 4.4%.

Short sellers have piled on the security, with short interest up 10% over the last two reporting periods. The 170.90 million shares sold short now make up 8.9% of the equity's available float, which would take shorts nearly a week to cover, at its average pace of daily trading. 

The options pits are firmly bullish, however. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day call/put volume ratio of 3.16 ranks higher than all readings from the past year.

 

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