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Goldman has ideas on how to make money by anticipating M&A deals

The mergers-and-acquisitions market is likely to heat up in 2018 as companies look to use tax savings or cash repatriated from overseas to fund deals, but many sectors and stocks have still not priced in the potential premium, Goldman Sachs said Friday.

Movements in listed options on stocks can be used to determine when institutional investors are expecting M&A activity, giving potential buyers of stocks a helpful guide, the bank said in a new report. And with activity expected to pick up after a slow 2017 when U.S. deals valued at more than $10 billion fell 18%, investors can use such option movements to their advantage.

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