MSFT Options Signal Bullish Bias: Target $500 Call Breakout as AI Momentum Builds

• MSFT trades at $486.03, down 0.3% from its 52-week high but above its 30D moving average ($484.29).
• Options market shows 70% more open interest in calls than puts, with heavy call buying at the $500 strike ahead of Friday’s expiry.
• Block trades hint at institutional positioning: A $300K put block at $510 (expiring Oct 31) and a $93K put sale at $490 (expiring Sept 26).

Here’s the takeaway: MSFT is primed for a bullish breakout. The options data, technicals, and AI-driven news all point to a high-probability trade setup. Let’s break it down.

Bullish Call Skew and Institutional Clues

The options market is screaming for a move above $500. This Friday’s expiry shows the MSFT20260102C500 call with 6,237 open contracts—the highest of any strike. That’s not just noise; it’s a crowd betting on a short-term pop. The next Friday expiry (Jan 9) sees similar heat at $500 and $510, with 4,358 and 2,691 contracts respectively.

But here’s the twist: The put side isn’t ignored. The MSFT20260102P470 put has 3,555 open contracts, acting as a floor. If MSFT dips below $483.73 (its 30D support level), that strike could catch buyers.

Block trades add intrigue. A $300K put block at $510 (MSFT20251031P510) suggests someone’s hedging a long position. Meanwhile, a $93K put sale at $490 (MSFT20250926P490) hints at confidence in the stock’s resilience.

AI News Fuels the Narrative

Microsoft’s AI story isn’t just buzz—it’s math. Wall Street’s $621 price target (27% upside) hinges on Azure’s 40% growth and its 27% stake in OpenAI. Recent headlines highlight Azure’s expansion into 33 countries and $250B in contracted services through 2030.

But here’s the catch: The market isn’t pricing in Copilot’s full potential yet. If Microsoft’s AI tools start converting pilots into paid seats, the $500 level could be a floor, not a ceiling. The options data agrees—call buyers are betting on this exact scenario.

Actionable Trade Ideas

For options traders, the MSFT20260102C500 call is a no-brainer. With MSFT currently at $486, the $500 strike is 3% out of the money. If the stock closes above $500 by Friday (Jan 2), the option could double in value. For a longer play, the MSFT20260109C500 call offers more time for the AI narrative to unfold.

Stock traders should watch two levels:

• Entry: Buy MSFT near $483.73 (middle Bollinger Band) if it holds.
• Target: Aim for $500, where call open interest is clustered.
• Stop: Below $473.20 (lower Bollinger Band) would invalidate the bullish case.

Bearish players could consider a put spread: Buy the MSFT20260102P470 and sell the MSFT20260102P450 to cap risk while targeting a dip.

Volatility on the Horizon

The next 10 days will test MSFT’s resolve. A close above $500 would validate the options crowd’s optimism and likely trigger a re-rating of Microsoft’s AI moat. Conversely, a breakdown below $473.20 could reignite concerns about Copilot’s monetization. Either way, the options market has already priced in a directional move—now it’s up to the stock to deliver.

Bottom line: MSFT is at a crossroads. The AI tailwinds are real, but execution matters. For traders, the $500 level is both a target and a test. Position accordingly.