Unusual Options Activity: Microsoft (MSFT)

Tech giant Microsoft (MSFT) has been a big winner from the tech stock rally, with shares up 63 percent over the past year. One trader sees shares continuing higher through the end of 2026.

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  • That’s based on the December 2026 $370 calls. With 1,016 days until expiration, 7,006 contracts traded compared to a prior open interest of 115, for a 70-fold rise in volume on the trade. The buyer of the calls paid $104 to make the bullish bet.

    Microsoft shares recently traded at about $400, making the options about $30 in-the-money. Shares are slightly down from their all-time high of $420.82.

    Microsoft has become an early leader in the AI space, with a number of strategic partnerships, including one with OpenAI, the maker of ChatGPT.

    Meanwhile, Microsoft saw earnings rise 33 percent last year, and the company has a massive 36 percent profit margin.

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  • Action to take: Shares are a reasonable buy at or under $400 per share. The potential growth in the years ahead from AI and the company’s various divisions make it an excellent long-term buy at the right price.

    Microsoft pays a 0.7 percent dividend, and has a history of increasing its payout over time.

    For traders, the December $370 calls are pricey, with each contract costing over $10,000. But being already in-the-money, any further gains in Microsoft could be leveraged higher for high double-digit returns.

    Traders with less capital can look for options with a higher strike price.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.

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