Goldman Sachs Suggests Buying Straddles on Wal-Mart (WMT)

Goldman Sachs is out with a research note this morning, where its analysts suggest that traders buy straddles on Wal-Mart Stores Inc. WMT ahead of earnings. The analysts noted that March $55 straddles only cost 3.7%, but shares have traded in a 7.2% range over the past two months. WMT's 1-month implied volatility of 15.6% is also one of the lowest in GS's coverage universe (some 600+ stocks), despite earnings next week. The analysts suggest buying the March $55 straddle for $2.06. Wal-Mart Stores, Inc. operates retail stores. The company operates in three business segments: Walmart U.S., International and Sam's Club. During the fiscal year ended January 31, 2010, The Walmart U.S. segment accounted for 63.8% of its net sales, and operated retail stores in different formats in the United States, as well as Walmart's online retail operations, walmart.com.