14d • General discussion
Microsoft Is No Longer an AI Hype Trade, but It's Still an Opportunity
Microsoft is quietly transitioning from an AI hype stock into an execution-constrained business, and the options market has probably not fully priced that shift yet. The key insight most investors are missing is that AI capex is no longer limited by capital or demand, but by electricity, grid access, and deployment timelines. This is a bottleneck.
This creates a narrow window where expectations compress faster than price moves, the exact environment where option sellers get paid. Volatility is elevated (IV Rank 29), but nowhere near panic. So, below is the structure I'm using to exploit that disconnect.
Asymmetric MSFT Put Ratio Spread:
Buy 1 x 445 put, Sell 2 x 435 puts for $280 net credit, >88% Probability of Profit, max profit $1.28k near 435, positive theta and slight bullish delta, risk only on sharp break below 430.
The preferred approach is to exit before the January 28 earnings release, or intentionally hold through earnings to capture IV crush if you accept gap risk. This trade is designed to monetize elevated downside volatility while keeping risk not directional. If the short puts are breached, the position is managed according to the Trading Plan.
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Microsoft Is No Longer an AI Hype Trade, but It's Still an Opportunity
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