$MSFT bulls keep scoring profits

Bullish option traders have been rewarded for a third time in the last month on upside positions in Microsoft (MSFT) today, as shares reach another new all-time-high.

On Jan. 30, Market Rebellion’s Unusual Activity scanners identified the purchase of 11,400 Weekly $175 calls expiring on Feb. 7 for $0.86 to $1.66 with shares at $171.49. This was clearly a new position, as volume was well above the strike’s previous open interest of 4,644 contracts.

Market Rebellion co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $5.99 today, or about 5 times their average purchase price. The stock rose 5.33% in the same time frame, showing how options can far outperform their underlying shares on  relative basis.

It is the third winning trade in the name to be posted on Market Rebellion over the 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 ended 3.29% higher today at $180.12, after making a new all-time-high of $180.64 earlier in the session. The software giant beat expectations for top and bottom line earnings in its quarterly report last week.