These options trades look cheap ahead of earnings, Goldman says

The stock market has seen big swings in both directions over the past few weeks, but that volatility does not appear to be priced in to some stocks with upcoming earnings reports, according to Goldman Sachs. The bank's derivatives research team, led by Vishal Vivek, found several stocks reporting next week whose options look relatively cheap. "We find, while the absolute level of implied moves are high, when adjusted for one month realized volatility, implied moves are only in their 18th percentile relative to the past 17 years; we look for names where implied moves are most under-priced heading into earnings. Our past studies have shown implied moves to be correlated with historical earnings-day moves," Vivek wrote. One of the biggest names on the list is Ford , which is scheduled to report on Oct. 26. The combination of global supply chain issues, the slowing U.S. economy and Ford's push into electric vehicles means that investors and analysts will have plenty to pick over in the report. Shares of Ford are down more than 41% year to date. There are also some energy companies that report next week. Goldman identified Hess on Oct. 26 and Chevron on Oct. 28 as underpriced events. Energy has been the lone bright spot for equity investors this year, but it has not escaped volatility. Chevron, for example, is up more than 47% for the year but is down 5% from its 52-week high in June. And on Oct. 27, L3Harris Technologies and Northrop Grumman both report. Defense stocks are not typically seen as a good place to harvest volatility, but Lockheed Martin jumped 8.7% on Oct. 18 after its earnings report, so there may be some extra uncertainty in the sector this quarter. Northrop touched an all-time twice this week. Investors who want to bet on the results of a quarter can use call or put options on these stocks, but those looking to bet on volatility in either direction can use straddles. Straddles are slightly more expensive than directional bets, but they can profit regardless of which way a stock moves. A straddle consists of a call and a put option with the same expiration date and strike price, which should be close to the market price for the stock. — CNBC's Michael Bloom contributed to this report.