MSFT Options Signal Bearish Bias at $450–$460 Puts, But RSI Dips Suggest Rebound Potential for Traders

• MSFT drops 2.1% to $467.09 amid energy cost pledges and insider selling
• Put/call ratio hits 0.7 as $450–$460 puts dominate open interest
• Block trades on $450–$460 puts hint at institutional bearish bets

Here’s the core insight: Options market sentiment is bearish at first glance, but technicals suggest a rebound could be brewing. The stock is trading near its 200-day moving average ($480.66) and just below its 30-day support zone ($478.22–$478.60). While the RSI at 38.87 points to oversold conditions, the MACD histogram’s slight positive shift adds a layer of complexity. This isn’t a clear-cut short, but it’s not a buy-the-dip either—let’s unpack why.

The Bearish Put Overhang and What It Means for Traders

The options chain tells a story of caution. Put open interest is concentrated at $450 and $460, with the $450 put alone accounting for 20,520 contracts. That’s a lot of bearish conviction, especially when paired with the block trades: MSFT20260116P510 and MSFT20260116P500 saw massive volumes (9,200 and 9,150 contracts) traded this week. These aren’t retail traders hedging—they’re institutional players betting on a deeper pullback.

But here’s the twist: the RSI is screaming for a rebound. When a stock drops into the 30s on the RSI, it often bounces—unless fundamentals are in freefall. Microsoft’s fundamentals? They’re still strong. Q3 revenue hit $77.67 billion, and analysts like Raimo Lenschow are sticking with $610–$665 price targets. The bearish options activity isn’t about Microsoft’s long-term health—it’s about near-term regulatory and energy cost risks. That creates a unique setup: a stock oversold but not broken.

News Flow: Green Initiatives vs. Short-Term Headwinds

Microsoft’s pledge to cover data center energy costs and invest in nuclear power is a win for sustainability, but it’s a drag on short-term margins. The stock’s 1.8% drop post-announcement wasn’t just about headlines—it was about investors pricing in higher operational costs. Trump’s comments about utility rates added fuel to the fire, creating a narrative that data centers will face more regulatory scrutiny.

Yet the news isn’t all bad. The $35 billion AI infrastructure spend and Copilot Checkout launch show Microsoft is still innovating. Analysts remain bullish on cloud and AI growth, but the market is punishing the stock for near-term execution risks. This creates a contrarian opportunity: if the stock tests $450–$460 and bounces, the rebound could be sharp—especially if the RSI breaks above 40.

Actionable Trade Ideas for MSFTOptions Play: Buy the MSFT20260116P460 and MSFT20260116P450 puts. These strikes align with the block trade activity and offer leverage if the stock breaks below $465.95 (intraday low). For a shorter-term bet, the MSFT20260123P460 (next Friday’s $460 put) gives more time for the bearish narrative to play out.Stock Play: Consider entry near $465.95 if the stock holds above its 200-day moving average ($480.66). A bounce here could target $478.22 (30-day support) and then $481.19 (middle Bollinger Band). If the stock breaks below $465.95, the next support is $450—but only go long if the RSI crosses above 40.Volatility on the Horizon

The next 10 days will be critical. If Microsoft’s stock holds above $465.95 and the RSI breaks 40, the puts could lose value quickly. Conversely, a breakdown below $450 would validate the bearish options bets. Either way, the $460–$450 put strikes are your best bet for directional exposure. For those who want to hedge, the MSFT20260116C500 call (OI: 18,588) offers a low-cost way to cap downside risk if the stock rebounds.

This isn’t a high-conviction trade—it’s a calculated bet on a stock that’s caught between long-term optimism and short-term caution. Keep an eye on the 200-day line and the RSI. If Microsoft’s fundamentals hold up, the market might just reward those who bought the dip.