Kevin Kelly's Bullish Microsoft Trade

On Bloomberg Markets, Kevin Kelly of Kelly & Co. spoke about a bullish options strategy in Microsoft Corporation (NASDAQ: MSFT), ahead of earnings.

The company is going to report earnings in October and Kelly thinks the stock is going to trade higher. To make a bullish bet, he wants to buy the October 75.50 call for $1.90. The trade breaks even at $77.40 or 2.60 percent above the closing price on Tuesday.

Kelly added that implied volatility is lower than usual for the earnings. The stock usually moves 4.5 percent in either direction on earnings and the options market is currently implying a move of 3.5 percent.