Option Traders Make Moves Amid MSFT Pullback

Puts have been more popular than usual in the options pits

Assistant Editor
Mar 8, 2021 at 3:25 PM
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The shares of Microsoft Corporation (NASDAQ:MSFT) are dipping 0.8% to trade at $229.80 at last check, after news that thousands of Microsoft customers were hacked. Plus, rising bond yields continue to weigh on tech stocks. Though the stock is now far removed from its recent Feb. 16 all-time high of $246.13, it just staged a bounce off the 80-day moving average at the $224 level. 

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No stranger to elevated options volume, Microsoft stock is on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume within the last two weeks, with new names to the list highlighted in yellow. According to this data, 543,482 calls and 338,310 puts were exchanged over this two week time period. The most popular contract was the weekly 2/26 235-strike call.  

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Despite calls outnumbering puts on an absolute basis, the stock's 10-day put/call volume ratio of 0.58 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) is in the 90th percentile of its annual range, implying a healthier-than usual appetite for long puts of late.

Now could be a good time to weigh in on MSFT's dip with options, too. The stock is seeing attractively priced premiums at the moment, per MSFT's Schaeffer's Volatility Index (SVI) of 28%, which sits in just the 9th percentile of its annual range.

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