MSFT Options Signal Bullish Bias: Key Strikes and Block Trades Point to $485 Breakout Opportunity

• MSFT surges 1.8% to $484.83, trading near 30D support/resistance at $478–$479.
• Call open interest dominates with a 1.53x edge over puts, especially at the $485 strike.
• Block trades hint at institutional positioning: A $300K put block and a 600-lot put sale at $490.

Here’s the takeaway: Options data and technicals align for a bullish breakout. The stock is perched at a critical juncture—support holds, and the call-heavy options chain suggests smart money is pricing in a push above $485. Let’s break down why this matters for your strategy.

Bullish Sentiment Locked in OTM Calls, Block Trades Signal Confidence

The options market isn’t whispering—it’s shouting. Call open interest (OI) at the $485 strike (18,764 contracts) and $500 strike (24,628) dwarfs put activity, even as the stock trades just $9 above the 200D MA. This isn’t random. Traders are hedging a breakout, not a breakdown.

But don’t ignore the puts. The $450 strike (10,478 OI) and $475 strike (9,898) act as a safety net for bears. If MSFT dips below $477.89 (intraday low), those puts could ignite a short-term rebound. The real drama? A block trade of 200 puts at $510 (MSFT20251031P510) and a 600-lot sale of $490 puts (MSFT20250926P490). These moves suggest big players are either locking in downside protection or betting on a near-term dip.

News Flow Fuels the Bull Case—But Hardware Woes Add Nuance

Microsoft’s Q4 blowout ($56.6B revenue) and the $60B Activision buyout are tailwinds. Azure’s $20.8B quarter and the Surface Pro 10 launch with AI features validate Microsoft’s pivot to AI-driven growth. Yet, the 18% Surface revenue drop in Q4 is a red flag.

The options market isn’t pricing in hardware woes, though. The $485 call OI and $500 call OI suggest investors expect earnings momentum to outpace hardware headwinds. The recent $50B buyback and NVIDIA partnership also signal management’s confidence—both of which could juice the stock if the AI narrative gains traction.

Actionable Trades: Calls for the Breakout, Stock for the Grind

For options traders: MSFT20251219C485 (this Friday’s $485 call) is a high-conviction play. If MSFT closes above $485 by Friday, the 18,764 OI could drive a gamma squeeze. For a longer-term bet, MSFT20251226C490 (next Friday’s $490 call) offers leverage if the stock holds above $478.36 (30D support).

For stock traders: Consider entry near $478.36 if the 30D support holds. Target $494.50 (Bollinger Upper Band) as a first profit zone. A breakdown below $469.05 (lower band) would invalidate the bullish case, so set a stop-loss at $475 to protect gains.

Volatility on the Horizon: A Bullish Crossroads

The next 72 hours will test MSFT’s resolve. A close above $485 would validate the call-heavy options chain and trigger a retest of the 100D MA at $507.66. But don’t get greedy—RSI at 43.34 suggests the stock isn’t overbought yet, but a push above $490 could attract profit-taking.

Bottom line: This is a setup where options sentiment, technical levels, and news flow converge. The risks? A breakdown below $477.89 would flip the script, but for now, the data leans decisively bullish. Stay nimble, and let the options market guide your entries.