Microsoft shares are surging. Here’s how to still make money, says Mike Khouw
📰 source: cnbc_topnews · 📊 technical
microsoft's q4 earnings sparked a record-setting single-day market cap gain of $450 billion. with the binary event behind, mike khouw proposes selling the august 21st weekly $412.50/$485 short strangle to collect $7.30 per share. that's a ~1.6% return in 21 days, or ~28% annualized, driven by post-earnings iv crush and time decay.
the put strike sits at immediate support, with a net break-even of $405.20, while the call sits above resistance, needing an 8.5% rally to threaten the position. if assigned the put, you'd own shares at an effective cost of $405.20; if assigned the call, you'd short at $492.30. at ~22.6x forward earnings, microsoft sits mid-range of its 20-year valuation, making a sideways move likely.
why it matters: selling the strangle captures post-earnings volatility crush, offering a high-yield income trade with defined risk at support and resistance levels.
source: cnbc_topnews
sentiment: +0.80 · impact: 0.70