Playing Microsoft Skew

Your next video will start in

Recommended Videos

  • Info

  • Comments


July 22 (Bloomberg) -- Dominic Chu reports on the latest markets news on Bloomberg Television's "Lunch Money."(Source: Bloomberg)

At our options update.

There is a shareholder meeting.

We have found a way to play the main.

Their microsoft, you can explain when we talk about dell , we talked about microsoft.

They do have a real role in the futures.

This is not the reason why you're looking at.

Cracks microsoft did a $2 billion cash infusion.

Template dell but you can play through other means.

We do know this is a company that has been on the upsize.

You can see shares did take a hit.

You can see this play out.

Is there a way you can structure a trade?

This is correct.

There's something in the options market we like to look at.

This is a sentiment indicator?

That is correct.

Cracks that is the skew of microsoft.

This is what is happening with the white line.

What is making you think you see options trade?

You have to take it into context.

This is flattening over time.

It is below what it normally is.

Cracks statistically it is not where it normally should be.

How exactly are you going to play for some kind of normalization?

Calls are little more extended.

We are going to have short calls and a long push.

There is a risk reversal.

We're also going along along the actual stock itself to maintain neutrality.

You are going to buy the stock which gives you expose your, losing money.

A gains if it goes up.

You are taking a shorter position using the calls.

When do you profit?

You're going to profit within the much.

You are going to hope that this normalizes.

Got you.

This is the way you play microsoft there.

This text has been automatically generated. It may not be 100% accurate.


BTV Channel Finder


ZIP is required for U.S. locations

Bloomberg Television in   change