Microsoft Just Hit 2025 Tariff Lows Again. Here's the Options Math on Whether It Recovers.

Why It Matters

Understanding the low probability of a near‑term rally but higher year‑end upside helps investors and options traders position themselves wisely around Microsoft’s volatile recovery prospects.

Key Takeaways

• Microsoft shares hit 2025 options low near $350.
• Analyst targets still near $587, implying upside potential.
• June 30‑day options show only 2% chance to reach $500.
• December options give ~12% probability for $500, 6% for $550.
• Implied volatility spike signals upcoming earnings event pricing.

Summary

The video examines Microsoft’s slide to its 2025 options‑price low, hovering around $350, and uses options‑pricing models to gauge recovery scenarios. Host Mike outlines recent price action—down from a $550 peak to the mid‑$300s—and highlights analyst price targets near $587, suggesting substantial upside if the broader market rebounds.

He breaks down implied volatility spikes ahead of an anticipated earnings announcement, noting a jump from roughly 29% to 37% in the 30‑day cycle. Probabilities derived from the Tastytrade platform show a mere 2% chance of the stock reaching $500 by the June expiration, versus a 12% chance by year‑end, with $450–$500 ranges carrying modest upside odds.

Mike cites historical parallels, such as Apple’s post‑dip rally and Nvidia’s surge after falling below $100, to argue that “blood in the streets” often precedes sharp recoveries in mega‑cap tech names. He stresses keeping risk defined, using a mix of short‑term and longer‑term option positions to capture potential moves.

For investors, the analysis suggests a cautious but potentially rewarding entry point: while short‑term odds are low, the longer‑term probability of a meaningful rally improves, especially if earnings exceed expectations. Traders should monitor volatility spikes and be prepared to adjust strategies as new data emerges.

Original Description

Options trading probability analysis on Microsoft stock takes center stage as tastylive's Math Check examines what the options market implies after a 24% decline and its worst quarter in 17 years. Explore recovery probability across June and December cycles, how to spot earnings using implied volatility jumps, and why 400 represents a realistic near-term target while 500 remains a low-probability outcome for June.

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CHAPTERS:

00:00 Microsoft at Worst Quarter in 17 Years: Setup Overview

00:35 Price History: From 550 High to 350 Low

01:03 Why MSFT at Multi-Year Lows Could Be an Opportunity

01:32 Near-Term vs. Long-Term Trade Approach

02:26 How to Spot Earnings Using Implied Volatility Jumps

03:35 June Cycle: What Probability Does the Market Price In?

05:00 Why 500 by June Is Only a 2% Probability

05:57 What Would Need to Happen for a Recovery to 500 in June

06:37 400 Strike: Most Realistic June Target at 30% Probability

07:16 December Cycle: Recovery Probabilities at 400, 450 & 500

07:44 Is 550 Possible by Year-End? The 6% Case

08:37 Key Takeaway & Closing Thoughts

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