Goldman: Long call strategies could pay off this earnings season

|By:, SA News Editor

"Options markets suggest this will be one of the most important earnings seasons in 10 years for stock pickers given low expected correlation and limited pre-positioning," says Goldman analyst John Marshall.

"We expect outsized profitability for call buying strategies on single stocks this quarter," he adds, noting options markets are actually pricing in a lower earnings-day move than any time on record for the average stock. "We expect earnings surprises to spark unexpectedly large stock moves."

The average earnings-day move last quarter was 3.5x as large as the average daily move, he says, greater than any other time in the past 17 years.

Goldman analysts see above-consensus reports from KORS, RYL, TIF, EOG, PXD, WNR, BBT, BX, LAZ, STI, BMY, THC, CMI, DOW, STZ, ARUN, OLED, QCOM, and XLNX.

Goldman's below the Street on ANN, IGT, MAT, COL, JOY, and MSFT.