MSFT Options Signal Bullish Bias at $500 Strike: Here’s How to Position for AI-Driven Growth

• MSFT trades at $481.44, with a short-term bearish trend but long-term range-bound structure.
• Options market shows heavy call open interest at $500, suggesting a key price target for bulls.
• Recent AI/cloud partnerships and GPT-5.1 launch could fuel near-term momentum.

Here’s the thing: Microsoft’s options market is whispering a clear message—traders are pricing in a bullish bias, especially around the $500 level. With technicals hinting at a potential rebound and AI-driven newsflow heating up, today’s setup feels like a crossroads between caution and opportunity. Let’s break it down.

Bullish Sentiment Locked at $500: What the Options Are Saying

If you look at the options chain, the MSFT20251212C500 call (expiring next Friday) has the highest open interest among OTM calls, with 5,303 contracts. That’s not random—it’s a vote of confidence. The same strike repeats as a top call option this Friday, showing sustained interest. Meanwhile, puts are clustered below $470, with the MSFT20251212P470 put at 6,376 OI. The put/call ratio of 0.63 (calls dominate) suggests traders are leaning long-term bullish, even as short-term volatility lingers.

But here’s the catch: the MACD (-8.26) and RSI (37.35) still show bearish momentum. The stock is trading below its 30D and 100D moving averages, which means a breakout above $490 could flip the script. And that’s where the block trades get interesting. A recent MSFT20251031P510 put block trade (200 contracts, $300K turnover) hints at hedging activity, but the lack of large put buying at current levels suggests bears aren’t in control yet.

AI and Cloud News: Fuel for the Bull Case

Microsoft’s recent headlines are all about AI and cloud expansion. From LG’s data center partnership to GPT-5.1 in Copilot Studio, the company is doubling down on its AI-first strategy. These aren’t just buzzwords—they’re revenue drivers. The 15.28% revenue growth projection from analysts isn’t just a number; it’s a signal that investors are pricing in long-term value. The Fairwater datacenter launch and Project Gecko’s language AI further cement Microsoft’s edge in a crowded market.

But here’s the twist: the market isn’t fully priced in yet. The stock is still trading below its 200D MA ($469.46 to $481.44), which means there’s room for a rebound if the AI narrative gains traction. The key is whether the $477.72 support level (30D support) holds—break below that, and the 200D MA becomes a critical battleground.

Actionable Trade Ideas: Calls, Puts, and Price Levels

For options traders, the MSFT20251212C500 call is a standout. With the stock at $481.44, this strike offers leverage if Microsoft breaks above $490. A stop-loss below $477.72 would protect against a short-term breakdown. For a longer-term play, the MSFT20251212C490 call (3,431 OI) could benefit from a gradual move toward the 30D MA at $491.80.

On the stock side, consider a long entry near $479.12 (30D resistance) if the price holds. First targets: $490 (RSI re-entry zone) and $500 (call-heavy strike). A bearish counterplay? A put spread between $470 and $465 (MSFT20251212P470 and P465) if the stock gaps down below $477.72.

Volatility on the Horizon: Balancing Bull and Bear

Microsoft’s story isn’t all sunshine. The short-term bearish trend and MACD divergence mean a pullback isn’t out of the question. But the options market—and the AI newsflow—suggest the downside is limited. The real risk? If the $477.72 support fails, the stock could test the 200D MA at $469.46. That’s a make-or-break moment for bulls.

Bottom line: Today’s setup feels like a setup for a breakout. The options market is pricing in a $500 target, and the fundamentals are aligning. But don’t ignore the short-term headwinds. Position with a clear plan—protect your downside, and let the AI-driven story play out.