Market News

November 23, 2016  Wed 5:16 AM CT

A large trader apparently believes that downside potential is limited in Microsoft.

OptionMonster's monitoring systems detected the sale of 15,000 March 55 puts in one print for $1.01 yesterday. This is clearly a new position, as open interest in the strike was only 557 contracts before the trade appeared.

Short puts lock in a price where investors must buy a stock, while letting them collect premium. Traders use the technique when they like a stock and think that the risk of a big drop is limited. (See our Education section)

MSFT rose 0.43 percent to $61.12 yesterday and is up 5 percent in the last three months. The software giant is scheduled to announce quarterly results after the close on Jan. 26.

Overall option volume was about average in MSFT yesterday.

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