$MSFT bulls score more profits

Bullish option traders have again been rewarded with big profits on upside positions in Microsoft (MSFT).

On Mar. 24, Market Rebellion’s Unusual Activity scanners identified the purchase of 2,200 April $144 calls for $6.50 to $7.95 with shares at $144.71. This was clearly a new position, as volume was clearly above the strike’s previous open interest of 1,152 contracts.

Those calls traded for as much as $23.99 today, at least 3 times their purchase prices. The stock rose 15.68% in the same time frame, showing how options can far outperform their underlying shares on a relative basis.

This follows another upside trade in Microsoft opened on the same day posted by Market Rebellion and updated at the end of last month.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

MSFT opened to trade as high as $170.00 early this morning but pulled back with the rest of the market to close off by 1.08% today at $163.49. The software giant has risen sharply since its recent lows.