Smart Money Moves with Microsoft Stock

Current Trading Price:

• $491.54 (Lower than recent peak, higher than recent low)

Investment Strategy:

• Shorting cash-secured puts with one-month expiry
• Potential benefits:
• Good return
• Lower buy-in price

Stock Valuation:

• Strong free cash flow and margins
• Potential worth: $682.55 per share

Previous Trade Example:

• Premium received: $7.10
• Expiry date: December 5
• Strike price: $500.00
• One-month yield: 1.42%
• Breakeven point: $492.90

Current Trade Opportunity:

• Expiry date: January 9, 2026
• Strike price: $475.00
• Midpoint premium: $5.63
• Out-of-the-money: 3.36%
• Cash required: $47,500
• Immediate income: $563

Potential Yields:

• Short-put yield: 1.185%
• Breakeven buy-in: $469.37 (4.5% below current price)
• Two-month income: $12.73
• Total yield: 2.68%
• Net breakeven: $462.73 (5.76% below current price)

Conclusion:

• Strategy: Short out-of-the-money puts
• Benefits:
• Good income
• Lower potential buy-in point
• Bottom line: Microsoft stock looks cheap; strategy can provide at least 1.1% monthly income.