Four shares from Goldman to option traders

Buy Yelp (YELP) May $41 straddles — This strategy captures Yelp's earnings report, plus 32 additional trading days, yet costs just 0.2% more than the amount shares have fluctuated after past reports. Goldman says this is too conservative given Yelp's earnings move in past quarters.

Buy Valeant Pharmaceuticals (VRX) May $16 straddles— This is intended to position for a potential increase in earnings-driven volatility. Once again, the current pricing for the contracts is extremely attractive relative to history, and it captures 32 extra days.

Buy Hasbro (HAS) $84 weekly straddles expiring April 27— The purpose of this strategy is to both capture the company's earnings report and play a potentially volatile quarter in the toy industry. Goldman analysts say Toys R Us' recent bankruptcy and store closings are sure to whip up price swings.

Buy Infinera (INFN) May $11 straddles— As outlined above, Goldman says options aren't adequately pricing in the possibility of earnings volatility.

Buy Seagate (STX) $57 weekly straddles expiring May 4— Goldman says the potential for a stock-moving company update ahead of earnings creates opportunity.

Source: Bloomberg Pro Terminal

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