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Microsoft traders look for more gains

Pete Najarian (ask-pete@optionmonster.com)

Microsoft has been on a tear since mid-April, and option activity was heavy to the bullish side going into yesterday's holiday.

optionMONSTER's Heat Seeker tracking program detected strong activity in the September 37 calls with less than 45 minutes left in Wednesday's shortened session, as big chunks traded for $0.32. More than 5,100 of the contracts changed hands, almost double the previous open interest, indicating that these are new positions.    

These long calls lock in the price where shares can be bought in the software giant. Investors use the options to get cheap upside exposure and generate leverage to the stock price in a rally. (See our Education section)

MSFT rose 0.07 percent to $34.01 and is not far off its highs for the year. Because Wednesday's traders were buying calls in the September expiration, they are giving the stock some time to make a move.

Overall calls in the name outpaced puts by about 22,000 to 12,500 in the session.

(A version of this post appeared on InsideOptions Pro on Wednesday.)

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