Thanks to what's being viewed as good news out of the black-robed Supremes in Washington, D.C., investors were gobbling up call options on Microsoft (MSFT) - Get Report, according to some options traders.
Tuesday morning, the
U.S. Supreme Court
remanded the antitrust case against Microsoft to a lower court, in what was viewed as a rebuff to the government and a victory for the software giant, which has been attempting to maneuver its appeal to the
U.S. Circuit Court of Appeals for the District of Columbia
. A couple of years ago, a three-judge panel of the appellate court issued a significant ruling in favor Microsoft.
Shares of Microsoft were up $2.81, or 4.6%, to $64.06.
One Wall Street options trader said there was a lot of call buying in Microsoft, notably the October 60 and October 65 calls. On the
Chicago Board Options Exchange
, the October 60 calls were trading up 1 3/4 ($175) to 4 7/8 ($487.50). The October 65 calls were trading up 13/16 ($81.25) to 2 1/16 ($206.25), on volume of nearly 5,400 contracts.
A call option is the type of option contract that gives the purchaser the right but not the obligation to buy a security for a specified price at a certain time and is a bullish wager on a stock.
In addition to the call buying on Microsoft, the trader was seeing call buying in
options, with the buying in both being done by "smart money," often big institutions. Intel's stock has been under assault since its revenue warning
Intel was down $1.38, or 3%, to $44. The trader highlighted buying in the Intel October 45 calls. Heaviest volume on the Intel October 45 calls was seen on the
American Stock Exchange
, where 5,680 contracts traded. The calls were trading down 3/8 ($37.50) to 2 5/8 ($262.50).
Meanwhile, Jay Shartsis, options strategist at
in New York, worried about the overall market's health considering that it didn't rally with the Microsoft news.