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

• MSFT trades at $478.51, down 0.16% with volume surging to 7.9M shares.
• Options open interest favors calls (1.35M) over puts (941K), with heavy call activity at $520 and put focus at $450.
• Goldman and Wells Fargo both raised price targets to $655–$665, citing AI-driven growth.
• Block trades hint at big money positioning: a 250-lot $500 put (expiring June 2026) and a 1,000-lot $510 call (February 2026).

The options market is whispering optimism, but technicals warn of a tight squeeze. Let’s break it down.Bullish OI Clusters and Hidden Risks in the Striking Zones

Options open interest tells a story of cautious bullishness. This Friday’s call volume peaks at the $520 strike (33,620 contracts), while puts cluster heavily at $450 (19,728). That’s a 1:1.7 ratio of puts to calls at those levels—classic bearish insurance for a stock that’s technically in a short-term bearish trend.

But here’s the twist: the put/call ratio for open interest is 0.696, meaning calls dominate overall. Big money is hedging downside risks but still leaning long-term higher. The block trade at MSFT20260618P500 (a $500 put expiring June 2026) suggests someone is quietly protecting a large position. Meanwhile, the MSFT20260220C510 call block trade (1,000 contracts at $510) hints at aggressive bullish bets ahead of February 2026.

Goldman’s AI Bet and the Market’s Mixed Signals

Goldman Sachs just upgraded MSFT to Buy with a $655 target—37% above today’s price. They’re betting on Azure AI’s 66% CAGR and gross margin recovery. Wells Fargo trimmed its target to $665 but kept Outperform. Both firms see Microsoft as a cornerstone of AI’s next phase.

Yet the stock is stuck in a long-term range between its 30D MA ($482.92) and 200D MA ($480.22). The RSI at 44 and MACD near -3 suggest momentum is neutral. The news is bullish, but the chart says “wait for a breakout.” That’s where options traders might be positioning: buying calls above $480 or selling puts below $470 to capture volatility.

Actionable Trades: Calls for Breakouts, Puts for Protection

For options traders, the most compelling setup is the MSFT20260116C520 call (expiring this Friday). With the stock hovering near $478, a break above $480 could trigger a rally toward $520, where heavy open interest exists. If you’re bearish, the MSFT20260116P450 put offers downside protection, but note the 200D MA at $480.22 is a critical support level.

For stock traders, consider:

• Long entry near $478.21 (30D support) if the price holds above $475.68 (intraday low). Target: $481.50 (middle Bollinger Band).
• Short-term exit at $480.96 (intraday high) if the rally stalls.

A risk-averse play could be a call spread: buy the MSFT20260123C500 (next Friday’s $500 call) and sell the MSFT20260123C525 to cap costs.

Volatility on the Horizon: Balancing AI Hype and Technical Realities

Microsoft’s AI story is compelling, but the stock isn’t in a hurry to run. The options market is pricing in a potential breakout above $480 or a breakdown below $471 (lower Bollinger Band). Until then, the block trades and analyst upgrades suggest patience.

Bottom line: This is a stock caught between bullish fundamentals and a technically neutral chart. If you’re in, protect with puts. If you’re on the sidelines, watch for a clean break above $480.22—the 200D MA—to confirm the trend.Final call: MSFT isn’t screaming higher, but the options activity and analyst upgrades make it a stock to watch. Play it smart—let the technicals guide your entry, and let the AI hype fuel your conviction.