Next leg of HY credit gains could be the equity of HY cos., where there’s “substantial relief rally potential” in biggest underperformers, Goldman derivatives strategists Katherine Fogertey, John Marshall write in note.
- 10 stocks that have underperformed their credit spreads: ALLY CIT FTR HCA LVLT NAVI POL RDN TMUS UHS
- Long GSCBHY25 <Index> DES <GO> is attractive relative-value trade vs long protection on CDX HY 5Y S25 in a 3x hedge ratio
- Buy BID Nov. $35 straddles for earnings, Nov. auction season
- Buy F Nov. $15 straddles before analyst event Nov. 19
- Buy TSN Dec. $46 calls for earnings upside
- Buy ALLY Jan. $21 calls for potential refinance of Series G by yr-end
- Buy VMC Dec. $97.50 calls; Calif. highway spending bill by yr-end
- Buy POL March $35 calls as cross-asset signals suggest upside in equity
- Buy HCA March $70 calls for potential equity converges w/ credit
- Buy LVLT March $55 calls as equity could close gap to credit
- Closing previous recommendations in OCRL and V at gains, in EMR at loss; previously closed LNKD, NOC, VLO trades at gains and CRI and VAR at losses; TWTR trade expired last wk at loss