Goldman's winning options strategy for the upcoming earnings season

11-07-2025

The second-quarter earnings season will kick into high gear next week, bringing with it an opportunity for options traders to make a profit, according to Goldman Sachs. John Marshall, head of derivatives research at Goldman, said in a note to clients Wednesday that his team thinks investors can find success by betting on outsized moves for stocks around the time that they report their latest earnings. "One of our preferred options strategies ahead of earnings is buying straddles on names where options implied moves are inexpensive relative to their typical earnings-day move," Marshall said. "When applied strategically across a portfolio, we find this overlay can provide a hedge or amplify upside exposure should the market make a correlated up or down move." Straddles are a type of options strategy where a trader buys both put and call options on the same stock, with the same strike price and expiration date. The goal is to profit from volatility, regardless of whether or not the underlying stock moves up or down. A straddle trade makes money when the move of the stock is greater than the premium paid to create the options position. Marshall's team identified several stocks with earnings dates this month where the implied move in the options market is low relative to history. Netflix One of the biggest names on the Goldman list is Netflix , which is set to report its results on July 17. The leading streaming platform has a history of big post-earnings moves, including a jump of more than 9% after its quarterly report in January. The stock enters this earnings season already up 40% year to date, through Thursday. However, shares of Netflix are off their highs made in late June, when the stock reached a record $1339, making that a level to watch if results are better than expected. NFLX YTD mountain Shares of Netflix are outperforming the broader market in 2025. Two other companies on Goldman's list set to report next week are Fastenal on July 14 and 3M on July 18. Those stocks are both up about 21% year to date. This week, 3M shares hit their highest level since 2021, while Fastenal reached an all-time record high dating back to its public debut in 1987. Industrial plays Later in July, there are other industrial stocks highlighted by Goldman. Defense contractor RTX is one, and it has also been a big winner in 2025. Shares of RTX are up more than 26% on the year, in part because of increased military spending plans in the United States and Europe. RTX is set to report on July 22. Honeywell , on the other hand, may need a post-earnings bounce to play catch-up. The stock has gained 5% this year through Thursday, less than the S & P 500. Honeywell reports earnings on July 24.

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