MSFT November 20th Expiration: Two Options Strategies Worth Considering

Microsoft Corporation (MSFT) has introduced fresh option contracts expiring on November 20th, presenting traders with an interesting decision point. With 312 days remaining until expiration, these longer-dated contracts offer premium sellers a chance to capture significantly higher income compared to near-term expirations. This extended time horizon fundamentally changes the math for both call and put sellers.

The Call Strategy: Covered Call Income Enhancement

For investors already holding or willing to acquire MSFT shares at the current $479.15 price level, selling a covered call represents one tactical approach. The $505.00 strike call contract is priced with a $40.00 bid, translating into a compelling income opportunity.

Here’s how the math works: Purchase MSFT at today’s price of $479.15, then sell-to-open the $505.00 call. This obligates you to deliver shares at that strike price. However, you simultaneously pocket the $40.00 premium. Should MSFT get called away at November 20th expiration, your total return reaches 13.74% (before commissions and dividends). That’s a meaningful boost to your return profile over roughly 10 months.

The $505.00 strike sits approximately 5% above current trading levels—out-of-the-money in options parlance. Current probability models suggest there’s roughly a 49% chance this contract concludes valueless, meaning you keep both your stock and the premium collected. In that scenario, the pure YieldBoost from the premium alone equals 8.35%, or 9.77% when annualized. The trade-off: you cap your upside if MSFT stages a significant rally.

The Put Strategy: Reduced-Cost Entry Point

On the put side, the $475.00 strike deserves attention. With a $37.70 bid, selling this put is equivalent to making a conditional buy order at $475.00 while collecting immediate income.

Execute a sell-to-open on this put, and you’re committed to purchasing 100 shares of MSFT at $475.00 if assigned. The $37.70 premium reduces your effective entry price to $437.30—about a 8.8% discount to today’s market price. For investors seeking to accumulate MSFT shares at better levels, this beats waiting and hoping for a price drop.

The $475.00 strike represents roughly 1% below current prices. Statistical analysis indicates approximately 60% probability this contract expires worthless—meaning no assignment occurs and you pocket the premium without buying stock. If that happens, you’ve earned a YieldBoost of 7.94%, translating to 9.29% annualized. The risk: if MSFT declines sharply, you’re obligated to buy shares at $475.00.

Comparing the Opportunity Set

Both strategies operate within a 27% implied volatility environment, while actual trailing twelve-month volatility measures closer to 24%. This 3-point spread in volatility metrics suggests options are pricing in moderate expectation for MSFT moves, neither exceptionally cheap nor expensive historically.

The put strategy suits investors with cash reserves comfortable deploying capital around current levels or modest discounts. The call strategy appeals to existing shareholders or those planning to buy at current prices, willing to exchange unlimited upside for meaningful premium income. Neither is inherently superior—the choice depends on your directional views and capital allocation preferences.

Both contracts offer reasonable risk-adjusted income opportunities relative to the 312-day duration, but traders should monitor how probabilities shift as expiration approaches and MSFT price action develops.