Patient $MSFT bulls turn big profits

Patient bullish option traders have been rewarded on upside positions in Microsoft (MSFT).

Way back on Jun. 12, 2018, Market Rebellion’s Unusual Activity scanners identified the purchase of 9,800 January $135 calls in one print for $2.55 with shares at $100.92. This was clearly a new position, as volume was well above the strike’s previous open interest of 2,981 contracts.

Those calls have traded for as much as $24.75 today, nearly 10 times their purchase price. The stock soared 58.13% in the same time frame, showing how options can far outperform their underlying shares on  relative basis.

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 is up 1.3% to $159.74 in midday trading, a new lifetime high for the software giant.