The stocks that may move the most on debt ceiling drama and how to play it with options

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Parts of the options market have not priced in the potential impacts of a government shutdown, Goldman says.

The looming threat of a U.S. government shutdown could rattle global markets this summer, but may also create an opportunity for options traders to profit, according to Goldman Sachs. The investment bank's derivatives research team said in a note to clients on Wednesday that the timeline for a government shutdown is potentially accelerating and that parts of the options market have not priced in the potential impacts.

As the deadline gets closer , investors in companies that rely heavily on government spending may get nervous. The Goldman team looked at a basket of stocks that have more than 20% revenue exposure to U.S. government spending, and found a few health care names whose stock options are pricing in relatively low volatility. Those names include drugmakers AbbVie and Merck and insurer UnitedHealth . All three stocks could be hurt by potential cuts or disruptions to government health care spending.

 

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