How to invest in election volatility, 15 options trades: Goldman Sachs
Deep dives on how to play the presidential election are piling up on Wall Street, but Goldman Sachs is warning investors that there are a lot of other votes worth paying attention to.
Equity Derivatives Associate Vishal Vivek says there could be a lot of volatility around state-level initiatives and regulations, and they could have big effects on how some major US companies do business in the years ahead.
So Vivek isn’t looking for the biggest potential winners based on the presidential ballot or the makeup of Congress. Instead, he’s targeting the stocks that might be the most volatile around election time because the companies might have a lot at stake.
“We’re most focused on identifying names with stock-specific drivers of volatility, as opposed to broad drivers such as potential weakness driven by changes in corporate taxes,” he said in a recent note. “State-level propositions included on the November ballots are important sources of volatility, that are likely under the radar of investors.”
What follows is a collection of seven key votes and themes that affect a total of 17 different “Buy”-rated companies. Vivek says each of them could see increased volatility based on the outcome of the presidential election or state ballot measures and tells investors how to trade each using call options.
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