Heavy trading in upside call options on Microsoft Corp. (Ticker: MSFT) suggests some traders are positioning for the price of the underlying to continue to push to fresh multi-year highs in 2014. The stock is currently up 1.85% to stand at $41.33 as of 2:10 pm ET. Earlier this month MSFT shares touched $41.66 and the highest level since 2003.
Traders looking for shares in the name to extend gains next week snapped up 20Jun’14 41.5 strike calls, with upwards of 21,000 of those contracts changing hands against open interest of just 320 positions. Time and sales data suggests most of the volume was purchased for an average premium of $0.27 apiece, and establishes an average breakeven price of $41.77. Bullish trading traffic was also concentrated at the Aug 43.0 strike, where more than 20,000 calls traded during the first half of the session. Most of the volume printed within the first hour of the trading day, and it looks like most of the calls were purchased for a premium of $0.69 apiece, on average. Buyers of the 43.0 strike calls stand ready to profit at expiration in the event that Microsoft’s shares rally another 6.0% over the current level to exceed the average breakeven price of $43.69.
