New Microsoft Options Offer Strategic Opportunities for Investors
Investors in Microsoft Corporation (Symbol: MSFT) have access to new options for the expiration date of May 9th. Utilizing our YieldBoost formula at Stock Options Channel, we have identified a noteworthy put and call contract from the new options chain.
Put Option Analysis
The put contract at the $385.00 strike price currently has a bid of $9.75. Selling-to-open this put contract requires an investor to agree to buy the stock at $385.00, while also earning the premium. This arrangement effectively lowers the cost basis of the shares to $375.25 (not including broker commissions). For any investor considering the purchase of MSFT shares, this option presents an appealing alternative to the current market price of $390.73 per share.
Notably, the $385.00 strike represents approximately a 1% discount from the current trading price, placing it in an out-of-the-money position. Current analysis indicates a 60% likelihood of this put contract expiring worthless. Stock Options Channel will continue monitoring these odds over time, providing updates and detailed charts on our website. In the event of expiration, the premium could yield a 2.53% return on the cash commitment, equating to a 21.50% annualized return, which we refer to as the YieldBoost.
Below is a chart that illustrates the trailing twelve-month trading history for Microsoft Corporation, with the $385.00 strike highlighted in green:
Call Option Analysis
On the call side, the contract at the $395.00 strike price is currently bidding at $11.80. If an investor purchases shares of MSFT at today’s price of $390.73 and sells-to-open that call contract as a covered call, they commit to selling the stock at $395.00. The total return would be 4.11%, excluding dividends, if the stock is called away at the May 9th expiration (before broker commissions). While this presents an attractive profit opportunity, substantial upside potential could be forfeited if MSFT shares appreciate significantly, emphasizing the importance of analyzing both the historical trading data and fundamental business metrics.
Here is a chart outlining the trailing twelve-month trading history for Microsoft Corporation, with the $395.00 strike marked in red:
The $395.00 strike is about 1% above the current trading price, putting it slightly out-of-the-money. If the call contract expires worthless, the investor retains both their shares and the premium earned. Analysis shows a 51% chance of this outcome, which Stock Options Channel will track over time with ongoing updates and historical charts. Should the covered call remain unexercised, the premium would provide a 3.02% additional return, or 25.63% annualized, also branded as YieldBoost.
The implied volatility for the put contract is currently 27%, while the call contract shows an implied volatility of 26%. In comparison, the actual trailing twelve-month volatility—based on the last 250 trading days and today’s price of $390.73—is calculated to be 21%. For further ideas on beneficial put and call options, you can refer to StockOptionsChannel.com.
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also see:
- Salesforce YTD Return
- Funds Holding EWZ
- Institutional Holders of ALDR
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
