Financial Services
GS
Goldman Sachs Group Inc.
Sell covered calls and cash secured puts on Goldman Sachs (GS). Higher volatility than traditional banks offers better premium.
Monthly Premium1.5-2.5%
Annualized Return18-30%
Stock Price$480-530
IV RankModerate (35-50)
Options LiquidityGood
Dividend Yield2.3%
Why GS for Covered Calls & Cash Secured Puts?
GS offers higher premium than traditional banks due to investment banking volatility. Strong dividend plus premium creates attractive total returns. The stock benefits from M&A activity and trading revenue.
Example Covered Call Trade
GSCovered Call
Strike Price$530 (6% OTM)
Expiration30 days
Premium$9.50 per share
Return If Flat1.9% ($950)
Return If Called7.7% ($3,850)
Keep Probability70% keep shares
Recommended Strategy for GS
Sell calls 6-8% OTM to capture the higher premium. GS works well for the wheel when accumulating on weakness during market stress.
Risks to Consider
- Market-sensitive revenue
- Deal flow dependency
- Trading losses possible
- Expensive to own 100 shares
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