And option pricing definitely indicates a downward bias. With Goldman trading around $100 a share, Bill Lefkowitz of vFinance Investments noted that $90 puts expiring Friday, September 16 are priced near $0.50 versus $110 calls at $0.30.
"GS, BAC (Bank of America), AIG, JPM (J.P. Morgan)are all getting beaten up, trend on almost all the financials has been down", he added.
In October, Goldman options are pricing volatility near the 60-percent level, or expectations of a daily price move of nearly four percent.
At-the-money straddles with that October expiration are trading near $16 which means, with Goldman at $100, a buyer of that straddle would need shares to be below $84 or above $116 to make money at settlement. But that is exactly what some traders think is possible.
With earnings as a potential catalyst for the broader market, Andrew Keene, an independent trader and blogger, is looking for an entry point at about that level.
"I have been a buyer of at-the-money straddles for October," he says. "Earnings could be a catalyst to make the market go higher."
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