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Option Brief: Microsoft Corporation (NASDAQ:MSFT) is fresh off a new 14-year high of $42 this morning. As such, short-term option volume is accelerating, as evidenced by the stock's 30-day at-the-money implied volatility -- up 22.2% at 17.9%. Along those lines, MSFT's weekly 6/27 42-strike call has seen noteworthy buy-to-open activity, as option players gamble on extended gains through the week's end.
By buying the contracts at a volume-weighted average price (VWAP) of $0.26, the traders expect the stock will muscle north of $42.26 (strike plus VWAP) by this Friday's closing bell, when the weekly calls expire. Obviously, this would require MSFT -- which has gained over 25% in the past year -- to notch yet another decade-plus high. Additional gains will accrue north of the aforementioned breakeven, while the buyers will lose no more than the initial premium paid, should the shares finish below the strike Friday evening.
Finally, China-based Jiangsu Phoenix Publishing & Media Corp Ltd announced earlier that its Shanghai Muhe Network Technology division has signed a distribution deal with Microsoft Corporation (NASDAQ:MSFT). Specifically, the Jiangsu Phoenix subsidiary will serve as the distributor of Xbox Live mobile titles throughout China.