$GS Options Intelligence

## Goldman Sachs (GS) Options Trade Recommendation – October 24, 2025

Current GS Price: $761.64

### Market Regime Assessment

• Fed Policy & Macro: The Fed’s next rate decision is on October 29, 2025. While the market is open, there is no recent FOMC announcement in your provided data, but the proximity to this event means implied volatility (IV) is elevated for near-term expirations. No major geopolitical shocks or economic crises are evident in the provided context; the main driver for GS today is firm-specific news.
• Sector & Peers: Financials (JPM, MS, C, BAC, WFC) are generally stable, with GS showing relative strength (+1.45% today) on acquisition news.
• Technical Setup: GS is above its 200-day MA ($655.06), confirming a bullish long-term trend, but currently sits below the 20-day ($773.81) and 50-day ($766.76) MAs, suggesting short-term consolidation or mild weakness. RSI at 47.08 is neutral, MACD is bearish, and volume is light.
• Fundamentals: Strong recent earnings (EPS $12.25 beat, revenue +19.5% YoY), healthy profit margin (27.7%), and a stable dividend ($4.00 quarterly, 1.84% yield). Next ex-dividend is December 2, 2025; next earnings is January 21, 2026.
• Catalyst: GS is nearing a deal to acquire a majority stake in Excel Sports Management, a strategic move into sports talent representation and fee-based private investments. This news is the primary driver of today’s price action and investor interest[7].

### Term Structure & Volatility Analysis

• Current IV: 42.4% (today’s expiry), which is extremely elevated versus the 90-day historical baseline of 21.7%. This is a strong sell premium signal for near-term options.
• IV Rank: 100% – Options are as expensive as they’ve been in the past year.
• Term Structure: Sharp IV drop-off after today; next week’s IV (26.4%) is much closer to baseline. This creates a calendar spread opportunity—sell expensive near-term IV, buy cheaper longer-term IV.
• Expected Move: ±$20.34 (2.67%) daily.
• Put/Call Volume Ratio: 0.25 (very bullish, heavy call buying).
• Market Maker Max Pain: $900 (far OTM, not a near-term factor).
• Dividend: Next ex-date is December 2, 2025—not a factor for October/November expirations.

### Trade Recommendation

🎯 SELL GS Oct 24 2025 770 CALL / BUY GS Oct 31 2025 770 CALL (Call Calendar Spread)

Rationale:
Today’s IV is 42.4%—more than double the baseline—while next week’s IV is 26.4%, only slightly above baseline. This >15% IV differential between adjacent expiries is a textbook calendar spread setup: sell overpriced short-dated options, buy fairly priced longer-dated options. The goal is to profit from accelerated time decay and IV collapse in the front-month option, while maintaining some upside exposure via the back-month call.

Entry Pricing (Mid Bid/Ask):
• Sell Oct 24 770 Call: Assume mid $2.50 (ask likely higher, but conservative for risk calculation).
• Buy Oct 31 770 Call: Assume mid $5.00 (bid likely lower, but conservative for risk calculation).
• Net Debit: $2.50 (sell) – $5.00 (buy) = $2.50 debit (per spread).

Trade Metrics
• Max Risk: $250 per spread (net debit).
• Max Profit: Unlimited if GS rallies sharply, but realistically, profit comes from IV crush and theta decay in the front-month.
• Breakeven: Depends on IV collapse and spot move; ideal scenario is GS near $770 at Oct 24 expiry, with IV dropping sharply.
• Probability of Profit: Elevated due to extreme IV and heavy call buying, but exact win rate depends on GS price action.
• Days to Expiration: 0 (Oct 24) vs 7 (Oct 31).

Greeks & Volatility
• Net Delta: Slightly positive (bullish bias).
• Theta: Positive (benefits from front-month decay).
• Vega: Negative (benefits from IV drop in front-month).
• IV Skew: Not provided, but call skew is likely elevated given heavy call volume.

Why This Trade
> “The term structure reveals a compelling opportunity: today’s IV at 42.4% is more than double the baseline, while next week’s IV at 26.4% is only slightly elevated. This creates a statistical edge for selling front-month premium and buying back-month at fair value. The recent GS acquisition news has driven call buying and elevated short-term IV, but the stock remains below key short-term MAs, suggesting limited upside in the very near term. This calendar spread capitalizes on expensive short-dated options while maintaining some participation in a potential breakout.”

Pro Analysis
• Current IV: 42.4% vs Historical: 21.7%
• IV Rank: 100% (extreme—sell premium)
• Expected Daily Move: ±$20.34 (2.67%)
• Put/Call Ratio: 0.25 (very bullish, heavy call buying)
• Technical: Below 20/50-day MAs, above 200-day MA, RSI neutral, MACD bearish
• Fundamentals: Strong earnings, healthy margins, stable dividend
• Sector: Financials stable, no broad weakness

Earnings Date Check
• Next Earnings: January 21, 2026 (89 days away)
• Recommended Expirations: October 24 & 31, 2025 (both before earnings; this is a short-term volatility play, not an earnings straddle)

Trade Management
• Entry: Place limit orders at mid-market or better for both legs.
• Exit: Close the entire spread if the front-month call decays to near zero, or if GS makes a large move beyond $780 before Oct 24 expiry.
• Adjust: If GS rallies sharply, consider rolling the long call up to a higher strike to reduce delta risk.

Pricing Validation
• Oct 24 770 Call: OTM, intrinsic value $0, trading above $2.00 (conservative estimate).
• Oct 31 770 Call: OTM, intrinsic value $0, trading around $5.00 (conservative estimate).
• Spread Pricing: Debit spread structure is valid; both options are OTM, above intrinsic value.
• **Put-Call Parity