Attractively Priced Bank Stock for Options Bulls

A round of upgrades could provide tailwinds as well

Jan 31, 2023 at 10:52 AM

Bank name Goldman Sachs (NYSE:GS) is curling higher after pulling back to its 200-day EMA, which has been a significant pivot since the 2022 summer. The stock is also back above its 21-day EMA. Large put open interest at the 340-strike has been acting as support as well. Now, GS is sitting above the 350-strike, which could be a pivot level and eventually move into becoming an average true range (ATR) trigger point.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GS’ 50-day put/call volume ratio of 1.26 ranks in the 79th percentile of its annual range – rolling over from all-time highs. Previous rollovers from this high have typically been bullish, and a continued unwinding of pessimism could give the shares a boost.

Now could be a good time to weigh in on the security's next move with options. The stock is seeing attractively priced premiums, per Goldman Sachs stock's Schaeffer's Volatility Index (SVI) of 23%, which sits in the low 5th percentile of its annual range.

Furthermore, the security's Schaeffer's Volatility Scorecard (SVS) sits at a relatively high 70 out of 100, meaning GS has exceeded option traders' volatility expectations during the past year.

There’s room for upgrades as well, as 12 of the 27 analysts in coverage carry a “hold” or worse rating on GS. Our recommended call option has a leverage ratio of 11.2, and will double on an 9.6% rise in the underlying shares.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this GS commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Follow @Schaeffers

Are You Ready for AI's Potential Supercycle Phase?
Amazon's Jeff Bezos surprised investors when he revealed that one emerging technology is the key to Amazon's future success... This technology could be worth $80 trillion by 2030. Learn more and join Motley Fool's Stock Advisor for 50% off!

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.