×

Microsoft's Moment of Truth

Microsoft
Photo by: Robert Scoble
Microsoft

With minutes to go before Microsoft's big earnings release, why are options traders suddenly getting bullish on this lumbering tech giant?

Option prices are implying a 4.5% move in the post-market for Microsoft, slightly more than its historical average of 4%.

Could cash be on traders' mind?

The software maker sits on a pile of nearly $40 billion, and some investors are hoping for either a huge dividend or a massive buyback to lift the moribund shares.

But it's Ballmer's future that could really jazz the stock.

"One of the fears investors have is that Ballmer will make a transformative transition instead of returning that money to investors," said Dan Nathan, "Options Action" contributor and Phoenix Partners' Chief Derivative Strategist. "If he were to step down, that fear gets resolved."

Either way, options traders seem to betting on a move to the upside, with call activity centering around the 26- and 27-strike in both the weekly and July expiry.

Questions, comments send them to us at: optionsaction@cnbc.com

Latest Video

Tutorials

Host Bio

  • Melissa Lee

    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

Options Action Traders

From Our Sponsor

Options Action Newsletter:

Sign up to receive exclusive Options Action content. Each month you'll receive an exclusive message from host Melissa Lee and insight directly from one of the members of our Options Action panel. Keep your pulse on the market with the Options Action newsletter.

Please enter a valid email address
To learn more about how we use your information, please read our Privacy Policy.