In the bustling month of June, companies host a series of events aimed at presenting their strategic visions to investors and Wall Street analysts. According to Goldman Sachs, this period also offers significant opportunities for options traders. The firm's derivatives research team highlights that purchasing call options ahead of these investor days has historically proven to be a lucrative strategy. By analyzing trends over the past 25 years, Goldman Sachs suggests that buying calls five days before an event and selling them one day after yields an average return on premium of +18%, with only two exceptions: 2008 and 2022, when broader market movements overshadowed short-term gains.
Goldman Sachs emphasizes the potential profitability of call options, which are contracts allowing holders to purchase stocks at predetermined prices in the future. These financial instruments essentially bet on stock price increases, offering discounts if the stock rises above the strike price before expiration. However, if the stock fails to meet expectations, the option expires without value, resulting in a loss of the premium paid.
This month, numerous companies are hosting investor days, presenting themselves as promising candidates for call option strategies. John Deere is set to hold a Brazil investor day on Tuesday, entering the event with strong momentum as its machinery stock has surged over 20% year-to-date. The company's performance surpasses the broader market, making it an attractive target for traders. Another standout is GE Aerospace, whose stock has skyrocketed by more than 50% year-to-date. Hosting its first investor day since splitting from General Electric last year, GE Aerospace presents an opportunity in a liquid options market.
Conversely, Humana, scheduled for an investor conference on June 16, offers a different perspective. Its health insurance stock has declined approximately 10% year-to-date, providing traders with a contrasting scenario to evaluate. Later in the month, Waste Management will conduct an investor day on June 24 at the New York Stock Exchange. Trading near all-time highs, the garbage collection company could attract interest from those seeking high-value opportunities.
As June unfolds, these corporate events not only provide insights into future business strategies but also serve as critical junctures for options traders to capitalize on potential market movements. Each company brings unique dynamics to the table, creating diverse scenarios for trading decisions. Whether riding on upward trends or exploring undervalued assets, traders can leverage these investor days to refine their strategies and enhance returns.