Bulls Look for More Gains in Microsoft

By Pete Najarian, co-founder of OptionMonster

NEW YORK -- Microsoft ( MSFT) has been on a tear since mid-April, and option activity was heavy to the bullish side going into Thursday's holiday.

OptionMonster's tracking programs 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 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.

Shares rose 0.07% to $34.01 and are not far off their 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.

At the time of publication, the author held no positions in any of the stocks mentioned.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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