What Options are Saying about Microsoft

Looking for a big move today in Microsoft stock ahead of its earnings? The options say "Don't count on it."

"Microsoft has tended to underperform in the volatility department ahead of its earnings," Rebecca Darst of Interactive Brokers said early Thursday on CNBC's "Squawk Box." "If you look back at the past couple of earnings cycles, back in January, options traders were pricing-in as much as an 8 percent move; it didn't quite even make it to 1 percent in January ... Right now the options are pricing-in about a 5 percent up or down move in Microsoft ."

Currently Microsoft is trading a little over $27 a share. Options traders have been buying calls that would allow them to buy Microsoft stock at that price or less in late July and August. That strategy will pay off if the stock moves higher.

"You can infer that option traders see less downside risk in connection with the earnings, and we have seen traders confidently trading the 25 and 26 strike calls in the July contract, extending those long positions to strikes 26 and 27 in August, so I think that if we were to make a call on this, it would appear that option traders are looking for a move ever so slightly to the upside, but not a volatile one," Darst said. (Check Microsoft options traffic here).