Microsoft Pushes Up Toward All-Time High, Options Traders Place Their Bets

Microsoft Corporation MSFT is challenging a $10 billion cloud computing contract the National Security Administration awarded to Amazon.com Inc AMZN. The contract, code named “WildandStormy,” will be used to modernize the NSA’s classified data storage.

The protest, filed July 21, is the latest in a battle between the two tech giants over a government deal. In 2019 the Pentagon awarded Microsoft a $10 billion cloud contract, known as JEDI, which Amazon subsequently disputed. In July of this year, the Pentagon canceled its contract with Microsoft.

On Thursday, Microsoft was head back up toward its all-time high of $291.55 but on below-average daily volume. Options traders believe Microsoft’s stock may get the momentum to break to a new all-time high over the coming weeks and together purchased $472,784 worth of bullish call contracts.

See Also: Is The Microsoft Party Over For Now?

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

See also: How To Buy Microsoft Stock

The MSFT Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

  • At 9:30 a.m., a trader executed a call sweep near the ask of 236 Microsoft options with a strike price of $290 expiring on Aug. 20. The trade represented a $25,960 bullish bet for which the trader paid $1.10 per option contract.
  • At 9:31 a.m., a trader executed a call sweep near the ask of 251 Microsoft options with a strike price of $290 expiring on Aug. 20. The trade represented a $27,861 bullish bet for which the trader paid $1.11 per option contract.
  • At 9:33 a.m., a trader executed a call sweep near the ask of 292 Microsoft options with a strike price of $290 expiring on Aug. 20. The trade represented a $36,208 bullish bet for which the trader paid $1.24 per option contract.
  • At 10:14 a.m., a trader executed a call sweep near the ask of 200 Microsoft options with a strike price of $295 expiring on Sept. 17. The trade represented a $58,000 bullish bet for which the trader paid $2.90 per option contract.
  • At 10:22 a.m., a trader executed a call sweep near the ask of 251 Microsoft options with a strike price of $280 expiring on Aug. 20. The trade represented a $222,135 bullish bet for which the trader paid $8.85 per option contract.
  • At 11:02 a.m., a trader executed a call sweep near the ask of 360 Microsoft options with a strike price of $292.50 expiring on Aug. 20. The trade represented a $42,120 bullish bet for which the trader paid $1.17 per option contract.
  • At 11:46 a.m., a trader executed a call sweep near the ask of 275 Microsoft options with a strike price of $287.50 expiring on Aug. 13. The trade represented a $60,500 bullish bet for which the trader paid $2.20 per option contract.

MSFT Price Action: Shares of Microsoft were trading up 0.8% to $289.35.

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