Microsoft (MSFT) has added 26 cents to $29.75 and options volume on the software-maker is running 2.5X the daily average, being driven by spread trading. The Jan – April 29 call spread was sold on Microsoft this morning at 44 cents, 20000X. Then, a bit later, 60,700 Jan 29 calls were bought for $1.78 and 58,985 April 29 calls sold at $2.20. Open interest in the Jan 29 calls is almost 200,000 contracts (the biggest in MSFT) and so today’s massive spread trades probably roll a positoin out three months — possibly part of over-writing on MSFT. The bulk of the Jan 29s were opened in late-April when the stock was 8.2 percent above current levels (rolling out of June 28 calls at that time — see 4/25 color).
About the Author (Author Profile)
Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.