On CNBC's Options Action, Dan Nathan spoke about unusually high options activity in Microsoft Corporation MSFT.
Nathan said that the company is reporting earnings on April 23 and the options market is implying a 3.5 percent one-day move on Friday after the event. The options volume was 2.5 times higher than the average daily options volume and the call options outnumbered puts 2 to 1.
When the stock was trading at $42.62 a trader bought 25,000 contracts of the May 44 calls for $0.47. Nathan noticed that these calls were marked as closing and he believes that the trader had sold some call options against a long stock position and since the stock reacted positively on Monday, he or she doesn't want to limit the upside potential.
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