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MSFT earnings 10/27 4:10pm

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MSFT earnings is 10/27 at 4:10pm. This is a huge earnings week, as the 4 mega cap stocks, MSFT, (on Thursday>>>)GOOG, AAPL & AMZN are scheduled to announce Q3. The expected for MSFT is as follows:

Q Earnings: +10.9%
Revenue: +7.9%
Y Earnings: +10.4%
Y Revenue: +8.6%
Previous Y Earnings: +21.3%
Previous Y Revenue: 13.6%
(credit: earningswhispers.com)

In the chart I see that MSFT is sitting in the middle of it's 3 month trend channel. It doesn't really help to gauge an optimal entry point at this point, 2 market days before earnings. The most popular strike price for 10/30 call is the $225 with 27,203 open interest, last trade price $150. And the most popular strike price for 10/30 put is the ($200 but far away) $210 with 4,009 open interest, last trade price $231. The put/call open interest ratio = .45 which is mildly bullish, so that doesn't help with sentiment. (credit: barchart.com) All in all, a good lower risk, modest reward play, given that there's no real clear signal as to the direction or intensity of MSFT price action after it's earnings announcement, would be to execute a 10/30 $225-210 strangle for a cost of $381 each. Good luck and happy trading friends...
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10/30 $225-210 strangle is $605 up $220 or +59%. A bird in the hand is safe to take a quick profit.
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