MSFT – Microsoft (Last:23.77)

We hold four October 13 puts @ 0.58, and the market could not be less kindly toward them, since Microsoft has been buoyant at a time when option volatilities have collapsed. Still, October is a long way off, and I doubt that the software giant’s fabulous earnings news — i.e., that it met Street estimates by laying off a whole bunch of workers — will propel this rally very far. Sit tight for now, and keep in mind that our goal will be to spread off our modest premium risk when the stock turns weak. _______ UPDATE: Our puts are a distant longshot at this point, although October is a lonnnnng way off. _______ FURTHER UPDATE:  We continue to hold four puts, but we’ll write them off for a $240 trading loss, since odds of a payoff have grown remote.

Tagged as: Forecast, Microsoft Corp, MSFT