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September 6, 2013  Fri 4:14 AM CT

MSFT: SEE CHART GET CHAIN FIND STRATEGIES
Microsoft dipped to a four-month low yesterday morning, and one trader is looking for a sharp move in the software giant's stock by next spring.

optionMONSTER systems show that a trader purchased blocks of 7,000 April 29 puts for $1.58 and April calls for $1.86. Almost an hour later, another 6,500 contracts changed hands at each strike for $1.59 and $1.84 respectively. Volumes were well above previous open interest, indicating that this is a new positioning.

The trade, known as strangle, cost about $3.44. The position is designed to profit from higher volatility and/or a big move in either direction by the stock through mid-April. (See our Education section)

MSFT was up fractionally yesterday to close at $31.24 after dipping to a morrning low of $31.02, its worst price since April. Shares gapped above $35 on Aug. 23 with the announcement of CEO Steve Ballmer's resignation but has been falling steadily since.
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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