MSFT Options Signal Bullish Bias: Key Strikes and Block Trades Point to $500+ Upside Potential

• MSFT trades at $486.33, down 0.28% from yesterday’s close
• Call open interest dominates at $500–$505 strikes ahead of 1/2 expiry
• Block trade of 200 MSFT20251031P510 puts hints at hedging activity

Here’s the thing: Microsoft’s options market is whispering a story of cautious optimism. With calls outpacing puts 1.4:1 in open interest and key resistance levels aligning with AI-driven growth narratives, today’s setup feels like a coiled spring waiting for a catalyst. Let’s break down why the $483–$508 range could be where the action happens.

Bullish Imbalance at $500+ Strikes and What Block Trades Reveal

The options chain is a treasure map if you know where to look. For Friday expiry (1/2/2026), MSFT20260102C500 and MSFT20260102C505 calls lead with 5,047 and 4,117 open contracts respectively. That’s not just noise—it’s institutional money betting on a push above the 30D moving average ($485.59) and into the 200D resistance zone ($508–$512).

But here’s the twist: A block trade of 200 MSFT20251031P510 puts (expiring Oct 31) moved $300k recently. That’s like seeing a storm cloud on the horizon—someone’s hedging against a potential short-term pullback while still holding long-term bullish conviction. Meanwhile, puts at $470–$485 have lower open interest, suggesting limited downside urgency.

Dynamics 365 Growth Validates the Bull Case

Microsoft’s AI-powered business apps are firing on all cylinders. Dynamics 365’s 21% revenue surge and 46,000+ enterprise clients aren’t just numbers—they’re tailwinds for MSFT’s stock. The options market isn’t just pricing in earnings optimism; it’s pricing in a structural shift toward AI-driven SaaS margins.

That said, institutional investors trimming stakes (like Hall Laurie J Trustee’s 2.2% reduction) add a layer of caution. But with analysts still averaging a $631 target, this selling feels more like portfolio rebalancing than a bearish signal.

Actionable Trade Ideas for MSFT Today

For options traders, the most compelling setup is buying MSFT20260102C490 (next Friday expiry, 3,543 OI) at $486.33. If MSFT holds above the Bollinger Band middle ($483.94), this call could capitalize on a breakout to $500. A tighter play: MSFT20260102C495 (3,400 OI) for a higher conviction move.

Stock traders should consider entry near $484.18 (today’s intraday low) with a stop just below $478.21 (30D support). First target: $495 (RSI 54 suggests room to rally), then $508 (200D resistance). For downside protection, a collar strategy using MSFT20260102P470 (2,910 OI) could hedge against a 3% pullback.Volatility on the Horizon: Why This Week Matters

The next 72 hours will test Microsoft’s resolve. A close above $488.35 (today’s high) could trigger a cascade of call options at $500+ strikes, while a drop below $472.91 (lower Bollinger Band) would invite short-term sellers. Either way, the options market is pricing in a 6–8% move by 1/2—so positioning now could let you ride the wave, not fight it.

Look, no one’s predicting a straight line to $600. But with AI tailwinds, a bullish options skew, and block trades hinting at strategic hedging, the risk/reward here feels skewed to the upside. Just keep an eye on that $483 support—it’s the line in the sand.