Heavy call volume was bullish on Microsoft yesterday, ahead of quarterly results next week.
optionMONSTER's tracking program detected the purchase of more than 14,000 July 54 calls for $0.11 to $0.22. Volume was more than 10 times the open interest at the strike, showing that these are new positions. Separately, 11,000 Weekly 54.50 calls expiring on July 22 were bought mostly $0.79 to $0.93 in volume far above that strike's open interest of 941 contracts.
Long calls lock in the price where investors can buy stock, allowing them to profit from a rally with limited capital at risk. Their cheap cost can also generate significant leverage on a percentage basis if shares move in the right direction. (See our Education section)
MSFT rose 0.56 percent to $53.51 yesterday and is up 4 percent in the last week. The software giant is scheduled to report earnings after the close next Tuesday, July 19.
Overall option volume was about average in MSFT yesterday.
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