Will Microsoft Continue Its Rebound?

Shares of Microsoft Corporation MSFT plummeted in early trading but staged a sharp rebound to end Monday’s trading session higher by 0.11%. Microsoft is set to report its quarterly earnings after Tuesday’s closing bell.

On CNBC's "Options Action," Mike Khouw of Optimize Advisors said the stock traded nearly 135% of its average daily volume on Monday, which made it the sixth most active single stock option for the day.

See Also: Why This Popular Analyst Sees Microsoft Give Another 'Robust' Quarterly Earnings

Calls outpaced puts by 1.5 times and implied a move of over 6% by the end of the week, which is “nearly double the 3% or so that its averaged over the last eight reported quarters,” Khouw mentioned.

There were buyers of 27,000 of the January 28 weekly 300 strike calls for an average price of $4.84 per contract, he said. This implies a move of at least 3% in Microsoft’s stock by Friday.