Patient $MSFT bulls win big

A large upside position opened in Microsoft (MSFT) in the spring is paying major returns today.

Back on May 7, Our tracking systems detected the purchase of 10,000 September $125 calls for $7.23 with shares at $125.40. This was clearly a new position, as open interest in the strike was 7,971 contracts before the activity appeared.

Those calls traded for as much as $15 today, more than twice their purchase price. The stock rose 11.11% in the same time period, illustrating the kind of leverage that can be achieved with options.

It is the second winning trade in the name posted here this week.

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 is up 1.04% to $138.69 in midday trading. The software giant has topped quarterly estimates twice the September calls were bought.