Microsoft (MSFT) loses 14 cents to $28.14 and is one of seven Dow stocks sporting losses late-Wednesday. Options on the software-giant are actively traded. 136,000 calls and 83,000 puts so far. Players are jockeying for position in short-term options in MSFT ahead of earnings. The company is due to report tomorrow, which is the Thursday before expiration-Friday. Jan 27.5 calls, which have the largest open interest in MSFT of more than 200K, are among the most actives. 26,666 have changed hands so far. However, the out-of-the-money Jan 27.5 puts are seeing the most volume. 36163 traded (73 percent Ask). Meanwhile, the top trades in Microsoft today is a Feb 26 – 28 (1X2) call ratio spread sold at 78 cents, 9000X. MSFT has moved up 15.8 percent since November 25 and the spread might roll a bullish position from in-the-money to at-the-money calls. Or, it might be closing. Meanwhile, implied volatility has eased 2.5 percent to 21.5 despite the weakness in the stock and the looming earnings release.