Call buyers score again in $MSFT

It took less than a week for bullish option traders to double their money in Microsoft.

On Nov. 26, Investitute’s tracking systems found that 4,000 Weekly $105 calls expiring Dec. 14 were purchased for $2.83 to $2.90 with shares at $105.07. Volume in the strike was only 225 contracts before those trades occurred, showing that they were new positions. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $6.50 today, more than twice their purchase prices. The stock rose 5.26% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options. It was the second winning trade in the name posted on Investitute in as many days.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

MSFT traded up to $111.11 late this afternoon but fell into the close with the rest of the market, ending the session off 0.84% at $110.19. The software giant has weathered the recent volatility better than most other technology leaders, briefly taking the crown of largest market capitalization from Apple (AAPL) along the way.