Bulls score big win in $MSFT

Option traders have doubled their money in Microsoft thanks to strong quarterly results.

On April 12, Investitute’s tracking systems detected the purchase of 21,500 July $120 calls for $5.75 above open interest of 11,173 contracts as part of a bullish spread with shares at $120.64. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls sold for as much as $12.75 today, more than twice their purchase price. The stock rose 8.82% in the same time frame, illustrating how quickly options can far outperform their underlying shares.

It is the second winning trade in the name posted on Investitute in as many days.

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 popped 3.31% to $129.15 today. The software giant beat earnings and sales estimates after the market closed yesterday.