Goldman Sachs shares 21 ETF option trades to make — including 3 it expects to return more than 500% — amid one of the most attractive options environments it's seen in 27 years
Goldman Sachs says there's rarely been a better time to buy options over the last 27 years.Most of the ETFs have over 100% call-option implied returns. , according to Goldman Sachs.
"Our GS-EQMOVE model suggests calls and puts are more attractive than in over 90% of months over the past 27-years," a team of analysts led by John Marshall said in the note. For example, on the upside, the Goldman model says there's a 22% chance the S&P 500 gains 5% in the next month, while the options market says there's a 7% chance that happens. Compared to the last 27-year period, those two percentages are fairly out of sync, meaning options are cheaply priced by Goldman's standards.In the note, the analysts gave concrete trade suggestions on how to capitalize on the favorable environment.
"For example, our analysts cover 73% of the weight of the iShares NASDAQ Biotechnology ETF and have a weighted average upside to price target of +40.8%; this implies a return of 769% on buying an IBB Oct 2023 at-the-money call for 4.7%," Marshall said.
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