Kevin Kelly's Microsoft Trade
He believes that the stock is trading at a cheaper valuation than its peers and he thinks that it might continue to trade higher after the earnings report on January 28.
Kelly wants to use options to make a bullish bet, because he thinks that calls are cheap at the moment. He would buy the January 29, 55 strike calls for $1.85, which sets breakeven for the trade at $56.85 or approximately 3.3 percent higher from the current stock price. Kelly explained that Microsoft moves 5 percent on average on earnings.
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