Two trades that just happened in 'Magnificent Seven' stocks point to big gains ahead

• In Alphabet, call volume was more than double put volume with nearly 150,000 calls initiated; 14 of the top 20 trades by dollar amount were bullish, with over $260 million in premium traded
• Microsoft saw over 130,000 calls purchased versus fewer than 52,000 puts, with nearly $500 million in options traded; one notable trade was a $12 million bullish spread with breakeven at $530 (2.3% higher)
• The bullish positioning comes as both stocks lag the broader Nasdaq, with traders targeting strikes requiring gains of up to 9% in Alphabet and potential new all-time highs in Microsoft

Summary: Bullish Options Activity in Microsoft and Alphabet Signals Upside Expectations

Key Developments:

Options traders placed significant bullish bets on Microsoft (MSFT) and Alphabet (GOOGL) on Wednesday, with both stocks showing options volume exceeding 50% above their 30-day averages. This activity occurred as the Nasdaq traded within 1% of all-time highs, while these two tech giants haven't reached new highs since at least May.

Market Performance:

Alphabet gained 2.7% and Microsoft rose 1.8% following better-than-expected economic data, including a softer inflation print.

Alphabet Trading Activity:

• Call volume more than doubled put trading, with nearly 150,000 calls purchased
• Over $260 million in premium traded, with $200 million+ tied to calls
• Among top 20 transactions: 14 bullish, 4 neutral, 2 bearish—an unusually one-sided stance
• Notable trades included 250-strike calls expiring June, 370-strike calls expiring November 20, and near-the-money 350-strike calls expiring Friday
• The 370-strike calls ($11.40 each) require a 9% rally to profit

Microsoft Trading Activity:

• Traders purchased 130,000+ calls versus 52,000 puts
• Nearly $500 million in options traded, with $400 million in call premium ($220 million purchased)
• Key speculative trade: $12 million spent on 3,000 in-the-money 500-strike calls (December 18), offset by selling $2 million in 600-strikes, creating a spread with breakeven at $530 (2.3% upside to new closing high)

Market Implications:

The heavily skewed bullish positioning suggests institutional traders anticipate significant near-term upside in both Magnificent Seven stocks.