Microsoft November 20th Options: Long-Term Strategies for Income Generation

Microsoft Corporation (MSFT) has just opened fresh option contracts expiring on November 20th, presenting traders with over 312 days of time decay working in their favor. This extended timeline creates a compelling window for premium sellers seeking higher yields compared to near-term expirations.

The Put-Selling Opportunity: Discounted Entry

The longer expiration window makes the $475.00 strike put contract particularly noteworthy, currently bidding at $37.70. This strike sits approximately 1% below MSFT’s current trading level of $479.15, meaning it’s technically out-of-the-money. For investors considering accumulating Microsoft shares, this structure offers an alternative pathway: by selling this put, you’d establish a purchase obligation at $475.00, but the $37.70 premium collected lowers your effective entry point to $437.30 per share.

The mathematical appeal is substantial. Analysis suggests a 60% probability this contract expires worthless, meaning the premium represents a 7.94% cash return, or roughly 9.29% when annualized. The November 20th expiration provides ample time for MSFT’s price action to evolve, reducing the likelihood of surprise assignment.

Looking at Microsoft’s twelve-month trading range, the $475.00 strike sits comfortably within normal volatility zones, suggesting this level isn’t unrealistic should market conditions shift unexpectedly.

The Covered Call Approach: Capping Upside for Income

On the call side, the $505.00 strike presents a covered call framework worth examining. At $40.00 per bid, this option lets you commit to selling MSFT at $505.00 if purchased today at $479.15. The total return calculation becomes compelling: the 5.4% price appreciation plus the $40.00 premium yields approximately 13.74% total return if the stock rises to that November 20th strike.

This $505.00 level represents roughly a 5% premium above current pricing. Historical analysis shows MSFT has previously operated well above this threshold, so assignment isn’t guaranteed. In fact, current data suggests roughly 49% odds the contract expires worthless, leaving you holding both your shares and the collected premium for an additional 8.35% return boost (9.77% annualized).

Volatility Context

Both strategies rely on a current implied volatility environment of approximately 27%, contrasting with the realized twelve-month volatility of 24% across Microsoft’s 250-day trading history. This slight elevation in implied volatility potentially increases premium collection opportunities for the November 20th contracts.

These option structures illustrate how extended expiration cycles can be leveraged for either entry optimization or enhanced income generation in established positions. For investors with conviction in Microsoft’s business trajectory, the November 20th contracts offer substantive time value to harvest.