Microsoft Sees Big Money Load Up $35M of Bullish Call Options Ahead of Earnings
$Microsoft (MSFT.US)$ saw big money load up a combined $35 million in bullish call options expiring by Oct. 18 just days ahead of the release of its quarterly earnings.
The three unusual trades were posted at exactly 11:58:20 a.m. in New York Friday, data compiled by moomoo showed. The biggest involved a buyer paying a premium of $17.4 million for call options that give the holder the right to buy 1 million Microsoft shares at $430 by Sept. 20.
The bullish options trades were posted as Microsoft shares rebound 1.6% to $425.02 at 2:51 p.m. after touching lowest in more than seven weeks on Thursday. The stock has fallen from a record $468.35, tracking declines across the broader stock market, as investors debate whether the financial results of the Magnificent Seven stocks and the semiconductor high flyers could live up to the hype over artificial intelligence that earlier fueled the rally.
(To see Microsoft's options chain, click here.)
On average, analysts expect Microsoft's Office 365 commercial business to expand 13.8% in its fiscal fourth quarter ended June 30, after the company rolled out its co-pilot powered by generative AI, estimates compiled by Bloomberg show.
"Microsoft's fiscal 4Q24 results will likely highlight its growing AI business and stable Office revenue, offset by pressure on its on-premise server unit," Bloomberg Intelligence analyst Lucas Ramadan wrote in a note July 22.
Adjusted earnings are expected to reach $2.94 a share on revenue that's predicted to rise 14.7% to $64.5 billion, according to the average of analyst estimates compiled by Bloomberg.
Still, Ramadan expects Microsoft to be conservative in its 2025 sales commentary, "given pressure on discretionary IT spending, as recently reported by Salesforce, Workday and Accenture."
"Management may indicate low-double-digit sales growth in constant currency for 2025, compared with consensus of 14%," he said.
Just days heading before the results are out, across all the 19 expiration dates of Microsoft options, the heaviest concentration of oustanding contracts are in calls that give the holders the right to buy the stock at $440, implying optimism for upside potential in the tech giant.
The combined open interest of those $440 calls stretching through Dec. 18, 2026 reached about 103,270 contracts, according to the latest data tracked by moomoo. Among contracts expiring by Friday next week, after the results are released, the biggest volume are in $450 calls.
So far, technical indicators tracked by moomoo are flashing positive signals for the stock. Nine of 15 of those gauges are signaling the stock may be oversold and the trend could turn bullish.
Share your thoughts on Microsoft below.
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Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
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Former editor at Bloomberg, then Lazard Asset Management. Posts aren’t investment advice. Views are just mine.
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homan Giliardi : Would never spend a dime on the Microsoft monopoly NOR Google
103648138 :
Laine Ford : I am doing going comment on the sun stock no more
Laine Ford : o comment
Loi73 :
Clay Bay : Big banks don't buy calls that heavy if it's not going to go in that direction. They know insider information that everyday people are not privy to.
102405503 No limit : overall.market will limit it rise
wendychoo :
Tonyco : MSFT is gonna do well I think, but even a earnings beat seems like it won't matter.. might still drop anyway. Seems as though no matter what unless you're Tesla or Meta they go down after earnings.
Laine Ford : maybe buy are sell
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