$MSFT option bulls continue to score

Option bulls are being rewarded today with big profits on upside positions in Microsoft (MSFT) as it sets a new record high.

On Oct. 27, Market Rebellion’s Unusual Activity Service found that 32,000 Weekly $320 calls, expiring today, were bought for $1.14 to $2.30 above the existing open interest of 12,184 with shares at $316.78.

Those calls traded for as much as $12.05  during this session, more than 5 times their purchase prices. The stock rose 4.6% in the same time frame, showing how options can far outperform their underlying shares on a relative basis.

This marks the third winning trade in the name to be posted on Market Rebellion in the last week.

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 at the close was at $331.62, up 2.24% on the session after setting new all-time-high of $332.00 made earlier.