MSFT Options Signal Bullish Bias: Key Strikes and AI-Driven Momentum to Watch for 2026 Breakouts

• MSFT’s call/put open interest ratio (0.69) shows strong bullish positioning, with heavy call OI at $500 and $510 strikes.
• Block trades hint at institutional hedging: A $510 put (MSFT20251031P510) saw $300K turnover, while a $490 put was sold en masse.
• Microsoft’s AI partnerships and $17.5B investment plan could fuel a breakout above $500, aligning with options market expectations.

Here’s the takeaway: MSFT is primed for upside. The options market is pricing in a bullish bias, technicals show a short-term uptrend, and the company’s AI-driven growth story is gaining real-world traction. Let’s break down why this setup matters for traders today.

Bullish Sentiment in Options and Block Trades

The options chain tells a clear story. For this Friday’s expiration, call open interest dominates at strikes like $500 (OI: 5,721) and $510 (OI: 4,168), while puts cluster at $450 (OI: 3,608) and $480 (OI: 3,317). This suggests traders are hedging against a dip but leaning heavily into a potential rally. The put/call ratio of 0.69 (put OI vs. call OI) reinforces the bullish tilt.

Block trades add intrigue. A $510 put (MSFT20251031P510) saw $300K in turnover, possibly signaling institutional hedging ahead of earnings or macro events. Meanwhile, a $490 put was sold in bulk (MSFT20250926P490), hinting at confidence that MSFT won’t collapse below key support levels. These moves suggest smart money is preparing for volatility but expects the stock to hold its ground.

AI News Fuels the Narrative

Microsoft’s recent headlines are no accident. The MahaCrimeOS AI rollout and 200,000 Copilot licenses deployed with Indian tech giants directly tie to its $17.5B AI investment plan. This isn’t just buzz—it’s operationalizing AI in real-time, which could drive revenue growth and justify a higher multiple. Analysts like Dan Ives (Wedbush) and Kirk Materne (Evercore) are already penciling in $600+ price targets, betting on Azure’s dominance in enterprise AI adoption.

The dividend story adds another layer. While the 0.77% yield isn’t flashy, Microsoft’s 600% payout growth since 2010 shows financial discipline. For income-focused traders, this stability complements the options-driven bullish case—especially if the stock breaks above $500.

Actionable Trade Ideas

For options traders, the $500 call (MSFT20251226C500) is a top pick this Friday. With 5,721 contracts in open interest, it’s a liquid strike that could benefit if MSFT closes above $500. For next Friday, the $530 call (MSFT20260102C530) offers leverage if the AI narrative accelerates. Both strikes sit above the 30D MA ($488.09) and below the 100D MA ($507.10), making them strategic for a breakout play.

Stock traders should watch $478–$479 (30D support) and $469–$470 (lower Bollinger Band). A close above $488.73 (intraday high) would validate the short-term bullish trend. Aggressive buyers could enter near $482–$483 (middle Bollinger Band) with a target at $500. A breakdown below $469.42 would trigger defensive plays, like a put spread at $450–$460 (MSFT20260102P450 and MSFT20260102P460).Volatility on the Horizon

The coming weeks will test MSFT’s resolve. With AI partnerships scaling and earnings reports due, the stock could see sharp swings. But the options market—and Microsoft’s fundamentals—point to a higher probability of a bullish outcome. Traders who position for a breakout above $500 while hedging with strategic puts could ride the AI-driven wave into 2026. Stay nimble, keep an eye on the $478–$480 support zone, and let the data guide your next move.