Will Microsoft explore new highs?
(The following is an example of notable trading cited on optionMONSTER's InsideOptions Pro service yesterday.)
Microsoft has been transforming, and the bulls are looking for the software giant to explore new levels.
optionMONSTER's Heat Seeker system detected interesting flows in August as buyers pushed up implied volatilities yesterday. The August 52.50 calls grabbed the most attention for $0.40, with volume topping 14,000 contracts. About 8,000 August 50s also traded more than 8,000 times, mostly for $0.90.
Long calls lock in the price where investors can buy a stock. Because they're so much cheaper than shares they can be a much safer way to play for a rally, and they can deliver some big leverage if the stock pops. (See our Education section)
MSFT was down 0.9 percent to $47.58 yesterday. CEO Satya Nadella delivered a great quarter in April after shifting attention to new business lines, and Bernstein reiterated its "outperform" rating with a $56 price target. The note said management is "aggressively transforming to a mobile and the now, cloud centric company with a greater focus on revenue synergies across multiple business lines."
Yesterday's activity doesn't necessarily mean that traders are looking for a run to new highs this week, but those buyers are definitely looking for upside into the summer.
Total volumes were an impressive 138,000 contracts, compared with 67,000 in a typical session. Calls outnumbered puts by a bullish 2-to-1 ratio, as well.
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