Call Traders Blast Microsoft Stock Amid Discord Buyout Buzz

MSFT has taken a breather from its February record high

Deputy Editor
Mar 23, 2021 at 10:17 AM
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Microsoft Corporation (NASDAQ:MSFT) is moving higher this morning, after Bloomberg reported that the tech behemoth is in talks to buy videogame chat platform Discord for more than $10 billion. Discord reportedly reached out to multiple buyers, and VentureBeat reported that the company is in final sales talks with at least one party. However, another person familiar with the matter said the company is more likely to go public. Still, the buyout buzz has MSFT up 1.2%, last seen trading at $238.78.

The recent selloff in the tech sector sent Microsoft stock pulling back from its Feb. 16, all-time high of $246.13. However, the damage has been contained so far by the shares' 80-day moving average. Year-over-year, MSFT is up 73.6%.

Call traders are piling on in response to the buyout talks. Already, 41,000 calls have exchanged hands -- triple the amount typically seen at this point -- versus 12,000 puts. Most popular is the weekly 3/26 240-strike call, where new positions are being opened, followed by the 245-strike call from the same series. This indicates that options traders see plenty of upside for MSFT by the time these options expire at the end of the week.

Now could be a good time to weigh in on Microsoft stock with options, too. The stock is seeing attractively priced premiums at the moment, per the security's Schaeffer's Volatility Index (SVI) of 22%, which sits in just the 2nd percentile of its annual range. 

 

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