These options plays can take advantage of earnings season volatility, Goldman says

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As earnings season heats up, there are several underperforming stocks with an opportunity to catch up to the market and benefit options traders, according to Goldman Sachs.

The firm’s derivatives research team identified buy-rated stocks that have underperformed the market by at least 6% over the past month to identify potential “relief rally” candidates during the earnings period.

“The sharp rotations in equity markets this year have created significant opportunities for stock picking,” Goldman said in a note.

“While macro concerns such as interest rates, inflation and uncertainty related to COVID-19 cases and vaccines have weighed on many stocks, we believe earnings events can remind investors that fundamentals ultimately drive sustained stock performance,” the bank said.