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

• MSFT trades at $480.78, up 0.46% with volume surging past 8.9M shares.
• Call open interest dominates (1.67M vs. 1.07M puts), with heavy concentration at $490–$500 strikes.
• Block trades hint at institutional hedging, while India investment and Oracle partnership fuel long-term optimism.

Here’s the takeaway: Options market sentiment tilts bullish, with technicals suggesting a potential rebound from key support. But let’s dig into why this setup matters—and where the risks lie.

What the Options Chain Reveals About Market Sentiment

The options market is a goldmine for reading crowd psychology. Right now, call open interest is 64% higher than puts, a classic sign of cautious optimism. For this Friday’s expirations, the top OTM calls cluster between $480 and $500 (OI: 8,524 to 9,034), while puts dominate below $475 (OI: 3,572 to 5,692). This suggests traders are pricing in a moderate upside bias—but bracing for a downside shock if the UK lawsuit escalates.

The block trades add intrigue. A $300K put block at MSFT20251031P510 (expiring Oct 31) and a $93K put sale at MSFT20250926P490 hint at institutional hedging. Think of it like a captain securing lifeboats before a storm—these moves don’t predict doom, but they signal awareness of near-term risks.

News Flow: Legal Risks vs. Strategic Wins

Microsoft’s week has been a mixed bag. The UK lawsuit could drag on for years, but the $17.5B India investment and Oracle partnership are game-changers for long-term growth. Analysts upgrading the stock cite Azure’s AI-driven momentum, which aligns with the options data’s bullish tilt. However, regulatory scrutiny remains a wildcard—every lawsuit filing could trigger a pullback toward the 200D MA at $471.

Actionable Trade Ideas for MSFT

For options traders: MSFT20251219C500 (next Friday’s $500 call) is a standout. With 24,187 open contracts, this strike sits just above the 30D MA and could catch a rebound if the stock holds above $477.67. A bear put spread using MSFT20251219P475 and MSFT20251219P460 (OI: 9,540 and 9,037) offers downside protection if the UK lawsuit spikes volatility.

Stock traders: Consider entries near $477.67 (30D support) with a target at $488.61 (Bollinger middle band). If the stock breaks above $485, re-evaluate for a push toward the 100D MA at $509.24. A stop-loss below $475.86 (intraday low) would limit risk.

Volatility on the Horizon

The next two weeks will test Microsoft’s resilience. While the options market leans bullish, the UK lawsuit and regulatory risks could create whipsaw moves. Focus on liquidity-rich strikes like $500 calls and $475 puts to navigate this tension. Long-term investors should watch the India investment’s execution—$17.5B is a bet on AI’s future, and the market will reward clarity on that front.

Bottom line: This isn’t a one-way bet. But if you’re positioned to capitalize on a rebound or hedge against legal headwinds, the tools are here. Stay nimble, and let the data guide your next move.