MSFT Options Signal Bullish Bias: Key Strikes and Block Trades Point to Strategic Entry Zones

• MSFT trades at $480.25, up 0.35% with volume surging past 5.9M shares.
• Call open interest dominates at $495–$505 strikes for Friday expiry, while deep puts at $460–$475 hint at downside caution.
• Block trades on expired puts ($510 strike) and recent AI partnership news create a volatile but structured setup.

Here’s the thing: MSFT’s options market is screaming direction. The call/put imbalance, combined with technicals and news flow, points to a high-probability upside breakout—if you know where to position. Let’s break it down.

Bullish Imbalance in OTM Calls, But Puts Signal Caution

The options chain is a chessboard of expectations. For Friday expiry (Dec 12), MSFT20251212C495 and MSFT20251212C500 have 15,751 and 9,034 open contracts respectively. That’s not just noise—it’s a crowd betting on a rebound above $495. But don’t ignore the puts: MSFT20251212P475 and MSFT20251212P480 have 5,692 and 4,837 open contracts, anchoring short-term support near $475.

The block trade on MSFT20251031P510 (200 contracts, $300K turnover) adds intrigue. Someone hedged against a $510 level breach in October—now we’re testing that line in December. It’s like a ghost of volatility past whispering, "Watch this price."

News Flow: AI Partnerships vs. Regulatory Headwinds

Microsoft’s recent partnerships with Cognizant, Infosys, and TCS to deploy 200,000+ Copilot licenses is a huge bullish catalyst. These aren’t just numbers—they’re real-world AI adoption at scale. But the state AGs’ letter about AI chatbot risks (and the 3% drop it caused) isn’t gone. The market is pricing in a tug-of-war: innovation wins vs. regulatory friction.

Here’s the kicker: MSFT’s $17.5B India AI investment and 46.3% operating margin show resilience. But if the Trump administration sides with Big Tech, the puts at $460–$475 might not hold.

Actionable Trades: Calls for the Breakout, Puts for the Safety Net

For options players, the MSFT20251219C500 (next Friday expiry, 24,187 OI) is a prime candidate. If MSFT breaks above the 30D MA ($496.81) and holds the $482.14 intraday high, this call could ride a wave of momentum. Pair it with a short-term put like MSFT20251219P475 (9,540 OI) to hedge against a pullback.

Stock traders: Consider entries near $477.67 (30D support) with a tight stop below $475.86. If the RSI (44.87) crosses 50 and MACD turns positive, target $508.32 (200D resistance). A break above $512.23 (Bollinger Upper Band) would validate the bullish case.

Volatility on the Horizon: Balancing Risk and Reward

MSFT isn’t just a stock—it’s a barometer for AI’s future. The options data and news flow paint a picture of a company at a crossroads: innovation could push it to new highs, but regulatory or competitive missteps might drag it down.

Right now, the odds favor the bulls. But don’t bet the farm. Use the OTM calls as leverage and the puts as insurance. The next two weeks will tell if Microsoft’s AI bets pay off—or if the skeptics get their moment in the spotlight.