Total profit for the spread would be $3.4 million in that scenario.Īs you’d expect, MSFT plunged below the 50-day moving average during the peak of the latest correction. On the other hand, the max gain for the trade occurs if MSFT closes at $35 or below on expiration.
The total cash outlay for this trade is roughly $600,000, which is the max loss for the trade. Specifically, a trader purchased 8,000 November 40 puts for $1.16 while simultaneously selling the November 35 puts for $0.40.
In this case, the debit spread is a vertical put spread, which makes money if the underlying goes down, up to a certain strike. Keep in mind, a debit spread is any type of spread which results in a cash outflow. This week, a trader bought a large block of put debit spreads in MSFT.
Unusual options activity software#
And, the software giant has been active in the acquisition space as well. However, the company is getting ready to release some new products heading into the holiday season. MSFT was having a mostly quiet year until dropping along with the broad market during the correction. Tech companies have been hit particularly hard as investors have been quick to take profits in the sector. As such, it’s no surprise for large companies, like MSFT, to be down with the overall market. The stock market has been quite volatile lately but has been more down than up. So what does unusual options activity in MSFT tell us? That’s 12% below the 52-week high and 10% from the 52-week low. $MSFT is trading at $43.22, down 6% for the year. For a good description of the company, follow the link. The company generates nearly $94 billion in revenues and $12 billion in profits per year. Microsoft $MSFT, as you likely are aware, is the largest software company in the world. So let’s take a look at some ‘interesting’ activity that caught our eye this week…
Unusual options activity professional#
This is something professional options traders pay a lot of attention to, and for good reason… Unusual options activity can “tip off” big moves in a stock, either up or down. | 0 Comments Unusual Options Activity In Microsoft $MSFTĪs many of you know, unusual options activity can be a valuable indicator as to what traders are thinking, and more importantly, where these stocks are heading in the short-term.
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