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An Investor's Guide to Profiting From the Government Shutdown

An Investor's Guide to Profiting From the Government Shutdown
Photograph by Andrew Harrer/Bloomberg

To most of the U.S., today’s government shutdown comes as a maddening peak in a long-rising fever line of political dysfunction. For hundreds of thousands of federal employees and their families, on the other hand, the shutdown means lost work and missing paychecks. And to the biggest private-sector contractors doing work for the government, the shutdown carries real business risks.

To the folks at Goldman Sachs, that means today could be a big trading opportunity. The investment bank has been sending clients a number of strategies to protect themselves and possibly profit from the gridlock in Washington. The main gambit: Find companies that do a lot of business with the government and then buy puts—contracts for the right to sell a company’s shares at a certain price in a certain time period.