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Dan Nathan's Microsoft Options Trade

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On CNBC's "Options Action," Dan Nathan spoke about an options trade in Microsoft Corporation (NASDAQ: MSFT), which is due to report earnings on Thursday.

Nathan thinks that it would be a good idea to sell the July 75 call for 65 cents and buy the September 75 call for $1.30. This options structure is called a calendar spread and in this case it costs 65 cents to initiate the position. Nathan wants the stock to trade up to $75 after the earnings, but it's important that it doesn't close above $75 at the July expiration. If the July call expires worthless, Nathan is going to own the September 75 call for 65 cents.

Posted-In: Dan Nathan Options ActionCNBC Options Markets Media


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