New Microsoft Options Trading Provides Investment Opportunities

Investors in Microsoft Corporation (Symbol: MSFT) noted the initiation of new options trading today, focusing on contracts expiring on April 11th. At Stock Options Channel, our YieldBoost formula has analyzed the MSFT options chain and identified one put and one call contract that stand out.

Put Contract Insight

The put contract at a $395.00 strike price shows a current bid of $9.20. If an investor sells to open this put contract, they commit to buying MSFT at $395.00 while collecting the premium. This effectively lowers the cost basis for the shares to $385.80, ignoring broker commissions. For those already looking to purchase MSFT shares, this strategy may provide a more appealing alternative to paying the current price of $399.43 per share.

As the $395.00 strike price represents approximately a 1% discount from the current trading price, the possibility exists for the put contract to expire worthless. Current analytical data indicates a 61% chance of this outcome. Stock Options Channel will monitor these odds over time, offering insights through published charts on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would yield a 2.33% return based on the cash commitment, which annualizes to about 19.79%. This is what we term as YieldBoost.

Call Contract Overview

Looking at the call side, the contract at a $405.00 strike price currently bids at $10.05. An investor who buys MSFT shares today at $399.43 and sells to open this call contract would be agreeing to sell the stock at $405.00. The premium collected would enhance overall returns, yielding a total potential return of 3.91% if the stock is called away at expiration, excluding any dividends and broker commissions. This strategy could limit upside potential if MSFT shares appreciate significantly.

To understand better, we’ve highlighted the $405.00 strike price in the chart below, showing MSFT’s trailing twelve-month trading history for reference:

As the $405.00 strike represents roughly a 1% premium over the current stock price, there remains a potential risk of the covered call contract expiring worthless. In this case, the investor retains both their shares and the collected premium. The current analysis suggests a 51% chance of this scenario occurring. Our website will track these odds and publish corresponding charts, including the trading history of the option contract. If the covered call expires worthless, the premium would represent a 2.52% increase in returns, equating to an annualized 21.38% yield, also classified as YieldBoost.

Volatility Insights

The implied volatility for the put contract is 26%, while the call contract carries an implied volatility of 21%. In contrast, our calculations reveal the actual trailing twelve-month volatility, based on the last 250 trading days, to be 21%. For additional options contract ideas, consult StockOptionsChannel.com.

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Also see:

• Institutional Holders of AFM
• FOE Historical Stock Prices
• Institutional Holders of JBN

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.