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Buying GS Calls Could Work Given Uptrend and Low Volatility

From the floor of the CME group, Dan Passarelli, CEO of Market Taker Mentoring, discusses his suggestions given the steady rise of Goldman Sachs since mid-May.

From the floor of the CME group, Dan Passarelli, CEO of Market Taker Mentoring, discusses his suggestions given the steady rise of Goldman Sachs since mid-May. GS exhibits relatively low volatility and recently crossed its 200 DMA, establishing a new level of support and forming a stable bullish base. He suggests buying July 170 calls at $2.25, or better. With this trade, risk is limited to the cost of buying the calls, but the potential is, Passarelli asserts, unlimited. Buying these calls with a July expiration means that there is plenty of time for positive price shocks to occur. He doesn’t endorse holding the trade until expiration; his time horizon is two weeks or so. In the event that the stock turns around, he would have a stop in place around $1.75.

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