Javascript DHTML Drop Down Menu Powered by Drop Down Menu
FullyInformed.com - Options and Stock Strategies For Income

SignUp For Updates 

  You are here:

Microsoft Corp  
Trades By Years
View MSFT-2011 Trades
View MSFT-2010 Trades
View MSFT-2009 Trades
Microsoft Articles

In The Money Covered Call
Trade Anatomy
Puts Better Than Gold
Ultimate Utility Stock
Put Ladder
Microsoft Stock Report
Using Moving Averages
 

About The Company

Market Cap  $215.2B
Revenue (FYR) $66.7B
EPS $2.36
Book Value 5.77
P/E Ratio 10.9x
Shares Outstanding 8.4B
Dividend $.64
Payout Ratio 24.1X
Debt to Capital 11.4%

Microsoft Corporation is engaged in developing, manufacturing, licensing and supporting a range of software products and services for different types of computing devices.

Its software products and services include operating systems for personal computers, servers and intelligent devices; server applications for distributed computing environments; information worker productivity applications; business solutions applications; computing applications; software development tools, and video games.

It operates in five segments: Windows & Windows Live Division (Windows Division), Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division. It also designs and sells hardware, including the Xbox 360 gaming and entertainment console and accessories, the Zune digital music and entertainment device and accessories, and Microsoft personal computer (PC) hardware products.

 

 

 
 
Should you find my strategy and ongoing evaluation of this trade of value I hope you will consider a tip for the time I spend detailing out this trade. I have set up a Paypal account for those who would like to donate. Thank you in advance. Remember, nothing on my site is financial advice. They are just my ideas and opinions. Investing is risky and losses can be large. Trade at your own risk. Read the terms of use

 
TOP 10
READ
ARTICLES
 


Clorox Call Options Go Through The Roof


Using Moving Averages For Profits In Cisco Systems Stock


Early Warning Tools To Spot A Collapsing Stock


Using The Spy For Hedging During Downturns


Applying The Strategy Of The Cautious Bull


Greek Debt Crisis - Investors Unprepared


Dividend Stocks The Cut Dividends


Microsoft - The Ultimate Utility Stock
Better Than Gold


How I Treat My Investing Like A Business


Charities Are An Industry

 

 
Trade Anatomy
Charities Are An Industry
Fed Understatement - Defying Logic
A Personal Comment On RIM
Exxon - Patience Is A Strategy
VISA - Risk Against Reward
Microsoft- Reverse Put Ladder
Research In Motion - Not For Investing
Thank You Ben Bernanke
Greek Debt Crisis
Dividend Stocks That Cut Dividends
The Cautious Bull Strategy
Defensive Stock Investing

Spreads VS Selling Puts

Thank You Tax Man
What Next For Research In Motion Stock

Latest Microsoft Stock Report

April Options Results
Comparing The Bear Markets Of 2000 to 2003 and 2007 to 2009
Microsoft Puts Are Better Than Gold
Dance Near The Exit
How I Treat My Investing Like A Business
Microsoft - The Ultimate Utility Stock
The Value Of A Plan
Staying In The Game
It's All About Oil
Market Trend: Still Up - But Watch For June

 

 
  MICROSOFT STOCK - 2011
Microsoft Stock Symbol - MSFT  Bookmark and Share
ONGOING EVALUATION & TRADE - Year 3
Goal: Income through selling put options
Objective: To not be assigned but to continue selling put options indefinitely. Selling put options at the money or near the money does not concern me. If assigned I will sell covered calls until I am exercised out of my shares. I will then return to selling puts.

This is the third year for my Microsoft trade. To date I have made around 10,000. In my opinion Microsoft more a utility type stock. It's dividend is secure and has been raised annually. Microsoft has a moat of cash protecting the company. Microsoft dominates the desktop and laptop platform with 90% of all machines worldwide running some form of Windows Operating System. Owning the company would be fine, but I remain more interested in generating income from the stock through consistent and regular selling of naked puts. Microsoft continues to repurchase its own shares. I believe this is a bullish sign. If you review the past years you can see the declining number of shares and the increasing dividend. The market cap has also increased as have revenue and earnings per share. You can also see how the trade has progressed and see the consistency of the stock and the strategy of selling put options.
ALL
PORTFOLIOS
INDEX
U.S. STOCKS
RETIREMENT PORTFOLIO
CANADIAN STOCKS

 
CURRENT U.S.
STOCK PORTFOLIO
INDEX

AT+T
CLOROX
COCA COLA
INTEL CORPORATION
JOHNSON & JOHNSON
KRAFT FOODS
MCDONALDS
MERCK & COMPANY
MICROSOFT
NUCOR CORPORATION
PEPSICO
SPYDER ETF
VISA
EXXON MOBIL
YUM! BRANDS

 
 
Should you find my strategy and ongoing evaluation of this trade of value I hope you will consider a tip for the time I spend detailing out this trade. I have set up a Paypal account for those who would like to donate. Thank you in advance. Remember, nothing on my site is financial advice. They are just my ideas and opinions. Investing is risky and losses can be large. Trade at your own risk. Read the terms of use

YEAR 1: 2009
 Trade Commenced Jul 10 2009
Goal for 2010: 1% per month
all figures for 6 months
Strategy: Sell Put Options until assigned stock
 
2009 - starting capital 22,000.00
2009 - ending capital 53,200.00
2009 - capital earned 4638.50
2009 - return on all trades 17.92%
   
YEAR 2: 2010
Goal for 2010: 1% per month
Strategy: Sell Put Options Until Assigned
 
2010 - starting capital 53,200.00
2010 - ending capital 51,000.00
2010 - capital earned 4422.50
2010 - return on all trades 34.69%
   
YEAR 3: 2011
Goal for 2010: 1% per month
Strategy: Sell Put Options Until Assigned
 
2011 -Capital Currently In Use 38634.00
2011 - capital earned 8096.00
TOTAL INCOME EARNED TO DATE 17157.00
Total Of My Own Capital Required 21477.00
Number Of Shares if assigned 1600
Share Price Valuation
(Total Capital Required/Number of shares)
13.43
YEAR - 3:  2011
TRADE COMMENCED July 10 2009
ONGOING STRATEGY - SELLING PUT OPTIONS UNTIL ASSIGNED
STRATEGY IN PLAY: REVERSE NAKED PUT LADDER
* ACTIVE TRADES ARE HIGHLIGHTED IN YELLOW
    Running Total From 2010               $9061.00
Jan 19 11 28.55 BTC 8 put options Jan 29 @ .57     17.00     (473.00) (2.04) 8588.00
Jan 19 11 28.35 STO 6 put options Jul 27 @ .95
COMMENTS See the rolldown below
    14.50   16214.50 555.50 5.1 9143.50
Jan 19 2011: THE ROLL DOWN
The Oscillator has been flashing overbought for a while now. Today with the stock at 28.55 I bought back my 8 Jan 29 puts and rolled 6 out to July at 27.00.What an exceptional trade this way. This frees up another 5800.00 of capital for writing more put options at lower strikes and reduces the number of puts I have at this higher strike level. Originally this was 10 contracts and through several rolls I have reduced my exposure and my strike level all the while still getting a credit on each subsequent roll. It is important to stay focused and remain with a strategy that has worked and not step away from that strategy. In this case I spotted the opportunity to roll a couple of days early and to roll less contracts and move lower. It is the consistency with having the plan always in focus and taking advantage of opportunities as they present themselves, that makes the strategy successful. Rolling naked puts in this manner has worked for me for many years.

Microsoft Stock Chart - Jan 19 2011

Jan 21 11 28.02 Expiry: 3 Naked Puts Jan 26 expired                
Jan 21 2011: Expiry: My Jan 26 put options expired. This leaves me with 6 July $27 put options and 8 Feb 25 put options. I have a lot of freed up capital to put back into puts, but looking at the technicals Microsoft looks like there could be a little bit of a bounce and then selling should come into this stock. The real warning is from MACD which since Jan 10 has been negative and despite the stock hanging in at these levels, it is widening indicating that selling is picking up in Microsoft. I will wait a bit before selling more put options.

Microsoft Stock Chart - Jan 21 2011

Jan 28 11 27.55 STO 3 Naked Puts Mar 25 @ .38     10.75   7510.75 103.25 1.37 9246.75
Jan 28 2011: It took a few days longer than I thought but today there was good selling and I sold just a few puts into March at 25.00. Why 25.00? Because I think that is where Microsoft is heading over the next month or so. There is good support at 25.00. I am already holding Feb 25 naked puts so I see no reason to load up on more. I can take my time and do a few here and there to take advantage of big down days.

Microsoft Stock Chart - Jan 28 2011

Feb 18 11 27.06 Expiry: 8 put options Feb 25 expired                
Feb 18 2011: EXPIRY: Today my 8 naked puts for Feb 25 expired. This now leaves me with 3 March 25 naked puts and 6 July 27 naked puts. I will be placing lots more as we move lower. I still believe the $25 strike is the point we are heading toward.

Microsoft Stock Chart - Feb 18 2011

Mar 1 11 26.25 STO 5 put options Apr 25 @ .58     13.25   12513.25 276.75 2.21 9523.50
Mar 1 2011: Microsoft is moving getting closer to the $25 level. Today I sold another 5 put options for April 25. I am just doing 5 as I think we will hit 25.00 and I want to get the best premium I can as we come falling down. Meanwhile though we are heading into oversold territory and while Momentum looks like it is picking up, MACD is actually showing buyers starting to arrive. I believe there will be more buying as we fall into that $25 range. If I am wrong and we keep falling, then I am going to end up holding a lot of 25 put options. (ha ha).

Microsoft Stock Chart - Mar 1 2011

Mar 16 11 24.70 STO 10 put options April 25 @ 1.23     19.50   25019.50 1210.50 4.84 10734.00
Mar 16 2011: Microsoft has reached $25.00 and closed below it. I sold more puts today.

Microsoft Stock Chart - Mar 16 2011

Mar 18 11 25.10 Expiry: BTC 3 put options March 25 @ .22     10.75     (76.75) (1.02) 10657.25
Mar 18 11 24.80 Expiry: Stock closed at 24.80
STO 5 put options April $24 @ .33
Comments: At today's close, I bought to close 3 Mar 25 naked puts and sold 5 for April at 24.
    13.25   12013.25 151.75 1.26 10993.25
Mar 21 11 25.25 STO 3 Naked Puts 18Jun11 $24 @ .74     10.75   7210.75 211.25 3.14 11204.50
Mar 21 11 25.25 STO 3 Naked Puts 16Jul11 $23 @ .59     10.75   6910.75 166.25 2.41 11370.75
Mar 21 11 25.25 STO 3 Naked Puts 22Oct11 $21 @ .60     10.75   6310.75 169.25 2.68 11540.00
Mar 21 2011: BACK TO REVERSE NAKED PUTS LADDER:

With the recent pullback of Microsoft I have spread 9 naked puts out over 3 different durations from June to October. Each set of 3 naked puts is at a lower strike. This is my return to reverse ladder naked puts. Microsoft has continued to perform well and stayed right within an acceptable trading range. I could continue to sell put options at the money month after month but it makes a lot of sense to now spread out the risk at lower strikes and reap the income. As my at the money naked put for April will probably expire out of the money, when those put options expire I will then take some of that capital and sell lower strikes further out and keep the ladder rolling month after month. Basically when the nearest month expires, it is then rolled out 3 months or so and at lower strikes. In this manner I will probably keep around 50,000 tied to Microsoft in lots of 3 contracts each and basically stay far out of the money. As the puts lose their value I will keep closing them early whenever profitable and sell those 3 contracts further out in time. In this way as Microsoft meanders around, I should be able to stay consistently out of the money.

Deciding on the strikes to sell is simple. Looking at the past year on Microsoft, the low was $22.73 and from there the stock made successively higher lows. My goal will be to stay around those levels and then have 3 contracts that I continue to sell as close to the money, monthly whenever the chart tells me trading that close to at the money has a good chance of not being assigned. Meanwhile I will continue to roll down the remaining 6 July $27 naked put contracts until they are at the money and then I will roll them forward and their capital will become that capital I use for AT THE MONEY trades.

Effectively then the capital in play will be reduced over the course of the year and the put contracts will be spread out over a wide variety of strikes. I have successfully used this strategy many times in the past including on Microsoft. With the stock now back into the mid $20 range, the reverse naked put ladder strategy should work well.

 Microsoft has a lot going for it and it continues to generate significant cash earnings through everything from Windows7, Office 2010 to its Kinect products and cloud computing, let alone the increasing share of search powered by Bing. Microsoft will be around for a long time but hopefully the stock will just keep trudging along which is perfect for the reverse naked ladder strategy.

 

                     
April 9 2011: MICROSOFT - THE ULTIMATE UTILITY STOCK

More than a decade ago Microsoft was a tech stock, but over the last 10 years, truly it is more a UTILITY stock than a tech stock. Read this report on the past 8 years of selling Microsoft stock options

 

MICROSOFT IS BETTER THAN GOLD:
In April 2003 gold was trading at around $325 US an ounce. Today (April 6) it is around 1455.00 - This is a 347% return. If I had invested $10,000 in gold at $325.00 US an ounce and cashed out today I would have a total of $44,028.30 which includes the return of my initial $10,000.00. Annualized this is a 20% gain.

However through selling Microsoft put options I have generated 33% annualized and a total return of 925%. Read the article.
 

Apr 15 11 25.38 Expiry: 15 Naked Puts April 25 expired
            5 Naked Puts April 24 expired
               
Apr 15 2011: Microsoft is back under pressure again. Yet looking at the one year chart 24.00 looks like a great strike. I already have a rever naked put ladder in play, so I am basically just adding to my gains by selling another 5 put options for May at $24.

Meanwhile I had 20 put options expire in April freeing up $49500.00 for additional put options. By selling the 5 May 24 I have used jusy 12,000 of that capital. This gives me lots more room for upcoming weeks should the opportunities arise.

Microsoft Stock Chart - Apr 15 2011
 

Apr 15 11 25.20 Sold 5 put options May 24 @ .30     13.25   12013.25 136.75 1.13 11676.75
Apr 19 11 24.94 Sold 15 put options May 24 @ .39
COMMENTS: Just  a few days ago I wrote how Microsoft was better than Gold for investment returns. Obviously few analysts agree with me because today it's down again. Well I love this stock and with so much free capital I jumped in and sold another 15 put options. I have been in and out of Microsoft over the past few years but just about every month I have some put options either being rolled or expiring. What a great stock it has been. Thank you Microsoft for making my returns so great. Keep doing what you are best at - simply going nowhere!
    25.75   36,025.75 559.25 1.55 12,236.00
Apr 19 11 24.94 STO 10 put options 21May 25 @ .61     19.50   25013.25 590.50 2.36 12826.50
Apr 29 2011: WOW is about all I can say. Third Quarter Earnings came out after hours yesterday and today the stock fell more than 4% at one point. What a great day to be in Microsoft stock for those of us who sell options. In the morning I bought and closed my May $25 and $24 strike puts and in the afternoon I was back selling them again. Double dipping (selling options in the same month) is so very good for my portfolio.

The market over reacted a bit on the Microsoft earnings. The earnings were very good but the very notion that Microsoft's core flagship product, Windows could be seeing a slowing of sales worldwide, shook investor confidence. My thoughts and opinions on the direction of Microsoft are here.

Microsoft Stock Chart - Apr 29 2011

My Microsoft stock options have been a terrific strategy since the day I started. Double digit returns every year and I still see Microsoft as a very strong stock for my put selling strategy. The Microsoft Stock History charts I uploaded show me that the trend for selling put options should continue. Those investors who are buying the stock and plan to "buy and hold" might want to reconsider Microsoft stock. My charts do not show any real value for buy and hold on Microsoft. I believe my Microsoft Stock Price History charts do NOT indicate any value holding the stock over the long term. Ten years ago the stock was trading basically where it is today.

Apr 29 11 26.28 BTC 10 put options 21May $25 @ .09     19.50     (109.50) (0.43) 12717.00
Apr 29 11 26.28 BTC 20 put options 21May $24 @ .03     32.00     (92.00) (0.19) 12625.00
Apr 29 11 25.38 STO 10 put options 21May $25 @ .32     19.50   25019.50 300.50 1.20 12925.50
Apr 29 11 25.59 STO 10 put options 21May $25 @ .27     19.50   25019.50 250.50 1.0 13176.00
May 20 11 24.80 BTC 20 put options 21May $25 @ .23     32.00     (492.00) (0.94) 12,684.00
MAY 23 2011The news that Microsoft bought SKYPE is depressing the stock. It's the same old issue for investors - fear of the unknown. The stock is having a lot of trouble, but on Friday I closed my May 25 puts early in the day and then today sold the same strike. I think $25.00 is good value in Microsoft and looking at the past year, Microsoft has revisited this level many times. I believe if the stock doesn't recover during the summer it will in the fall. I don't plan on putting any more capital into Microsoft, but instead I will roll the puts forward if they end up in the money.

If I was very worried about Microsoft I would not be selling puts but would be waiting to see if the stock falls further or can hold and gradually move back up. If I wanted to sell puts but was not too worried I probably would be selling at the 23 strike. I have a reverse naked put ladder on Microsoft right now which you can read about here.. .

Microsoft Stock Chart - May 23 2011

May 23 11 24.10 STO 10 put options 18JUN $25 @ 1.05     19.50   25019.50 1030.50 4.1 13,714.50
JUNE 17 2011I did quite a number of trades with Microsoft today. To explain them fully, you can read this article which explains the continued reverse naked put ladder..
Jun 17 11 24.25 Buy To Close 10 put options 18JUN11 $25 @ .79     19.50     (809.50) (3.2) 12,905.00
Jun 17 11 24.25 Buy To Close 6 put options16JUL11 $27 @ 2.83     14.50     (1712.50) (10.56) 11,192.50
Jun 17 11 24.13 Sold 6 naked puts 21JAN12 $26 @ 3.00     14.50   15614.50 1785.50 11.43 12,978.00
Jun 17 11 24.13 Buy To Close 3 Naked Puts 17JUN11 $24 @ .02     10.75     (16.75) (0.10) 12,961.25
Jun 17 11 24.13 Sell To Open  3 Naked Puts 20AUG11 $23 @ .58     10.75   6910.75 163.25 2.3 13,124.50
Jun 17 11 24.13 Sell To Open 3 Naked Puts 20AUG11 $22 @ .36     10.75   6610.75 97.25 1.4 13,221.75
Jul 5 11 25.99 Sell to Open 10 Naked Puts 20Aug11 $24 @ .25     19.50   24019.50 230.50 0.95 13,452.25
Jul 5 11 25.99 Sell To Open 5 Naked Puts 17SEP11 $24 @ .47     13.25   11,986.75 221.75 1.8 13,674.00
JUL 5 2011: Today I entered into a stock purchase as well as put selling on Microsoft stock. On July 7 I sold the stock for a 3.1% gain. In this article I explain the importance of a plan, goal and objective PRIOR to commencing the trade, in attaining success when it comes to trading. This trading anatomy can be used on any stock trade. I hope you enjoy the article.
Jul 5 11 25.99 Bought 1000 shares at $25.99     7.00   25,997.00      
Jul 7 11 26.81 Sold 1000 shares at $26.81     7.00   26,803.00 806.00 3.1 14,480.00
Jul 11 11 26.66 Bought to close 3 Naked Puts Aug 22 @ .05     10.75     (25.75) (0.38) 14,454.25
Jul 11 11 26.66 Bought to close 3 Naked Puts July 23 @ .01     10.75     (13.75)   14,440.50
JUL 12 2011: To understand this new In The Money Covered Call Trade, read this article.
Jul 12 11 26.42 Bought 2000 shares at $26.42
COMMENTS: I bought these shares for a new in the money covered call trade
    7.00   (52,840.00)      
Jul 13 11 26.89 Sold 10 Covered Calls August 25 @ 2.12     19.50     2100.50 2.6 16,541.00
Jul 13 11 26.90 Sold 10 Covered Calls August 26 @ 1.34     19.50     1320.50 3.4 17,861.50
Jul 18 11 26.44 Bought to close 3 Naked Puts 20AUG11 $23 @ .08     10.75     (34.75) (0.50) 17826.75
Aug 4 2011: Just like the Intel Stock trade Microsoft too could not withstand the selling today. It fell 3.64% and now sits at the 200 day moving average. I did a lot of trades today to free up capital and prepare for any further selling. The stock could see a bounce up over the next few days but then I think the stock could be heading to at least $24.00 in any bear market.

I unwound my covered call trade even though I believe the better thing would be to sell 1000 shares and and close the $25 covered call but hold the remaining shares and retain the $26 covered call, but after looking at my position I think I prefer to hold the Jan $26 puts which basically if assigned will cost me nothing as I have earned more than the cost of the 600 shares. That doesn't mean I am just going to let them be assigned. I plan to keep rolling them as we get nearer to January.

Microsoft Stock Chart - August 4 2011

Aug 4 11 26.70 Bought to close 3 naked puts Oct 21 at .23     10.75     (79.75) (1.2) 17747.00
Aug 4 11 26.65 Sold 2000 shares at $26.65     7.00   53293.00 453.00   18200.00
Aug 4 11 26.65 Bought to close 15 Naked Puts Aug 24 at .10     25.75     (175.75)   18024.25
Aug 4 11 26.00 Bought to close 10 Covered Calls Aug 26 at .68     19.50     (699.50)   17324.75
Aug 4 11 26.00 Bought to close10 Covered Calls Aug 25 at 1.31     19.50     (1329.50)   15995.25
Sep 6 11 25.20 Sold 10 Puts 17SEP11 $23 at .22     19.50   23019.50 200.50 0.87 16195.75
Sep 6 11 25.22 Sold 10 Puts 22OCT11 $22 at .31     19.50   22019.50 290.50 1.3 16486.25
Sep 16 11 27.12 Expiry: 10 Puts 17SEP11 $23 expired                
Oct 21 11 27.16 Expiiry: 10 Naked Puts Oct $22 expired                
Nov 9 11 26.13 Sold 5 Naked Puts 17DEC11 $24 at .33     13.25   12013.25 151.75 1.2 16638.00
Nov 21 11 24.95 Sold 5 Naked Puts 17DEC11 $23 @ 20     13.25   11513.25 86.75 0.75 16724.75
Nov 25 11 24.30 Sold 5 Naked Puts 17DEC11 $23 @ .23     13.25   11513.25 101.75 0.88 16826.50
Dec 16 11 26.00 Expiry: 10 17DEC11 $23 puts expired / 5 17DEC11 $24 puts expired                
Dec 19 11 25.55 Sold 10 18FEB11 $23 puts @ .35     19.50   23019.50 330.50 1.4% 17157.00
Microsoft Corp  
Trades By Years
View MSFT-2011 Trades
View MSFT-2010 Trades
View MSFT-2009 Trades
Microsoft Articles

In The Money Covered Call
Trade Anatomy
Puts Better Than Gold
Ultimate Utility Stock
Put Ladder
Microsoft Stock Report
Using Moving Averages
 

 

Disclaimer: There are considerable risks involved in all investment strategies. Trade at your own risk.
Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed or presented are financial advice, trading advice or recommendations. Fullyinformed.com is a private website. Everything presented and discussed are the author's ideas and opinions only.
By using this site, you agree to be bound by its terms of use. The full terms of use can be read here. If you do not agree to the terms of use, do not use this site. The author of fullyinformed.com assumes no liability for topics and ideas discussed, errors and omissions, ads and their content and external links. Any corporate insignia used are registered trademarks of their respective company or corporation and are being used for identification purposes only. All material copyrighted by FullyInformed.com. Reproduction in whole or in part prohibited. Copyright 2008

 |  site map  |  privacy policy  |  contact me  |  subscribe  |  exchange links  |  the author of fullyinformed  |