Microsoft Options Activity Yields Early Gains, Stocks to Watch Emerge

Unusual options activity in Microsoft (MSFT) stock has already paid off for one institution, and three other stocks to watch have been identified. On Thursday, MSFT had two of the top three Vol/OI ratios, indicating a high level of trading interest. The unusual options activity was due to 14,875-contract trades at 11:21:05 a.m. ET yesterday on the Oct. 30 $600 call and $525 call.

The trades accounted for 13% of Microsoft's total options volume that day, well below the 30-day average of 476,190. The options flow points to a low-risk Bull Call Spread, where an institution bought 14,875 $525 call contracts long for $923 per contract or $13.73 million and simultaneously sold 14,875 $600 call contracts for $86 in premium per contract, or $1.28 million.

The risk/reward ratio was initially 0.13 to 1 but has improved to 0.28 to 1. The shares are up more than 3% from yesterday's trade prices. Three other stocks identified with unusual options activity include Robinhood Markets (HOOD), Moderna (MRNA), and ExxonMobil (XOM).

The institution that made the trade on MSFT is already seeing a return, as the shares have increased by more than 3% from yesterday's prices. The Barchart Technical Opinion for MSFT is a 100% Strong Buy.