Two important pieces of information from the article are:
1. Big people with a lot of money who can buy or sell many shares of Microsoft think that the price of Microsoft will go down in the next few months. They have bought options to bet on this, which are like tickets to make money if something happens. 2. These big people are thinking that the price of Microsoft could be between $310 and $510 per share in the next three months. This is based on how much they are buying and selling different options for different prices.
Read from source...
- The title is misleading and sensationalist. It implies that there are only whales (large investors) who have a bearish stance on Microsoft, while the article shows that 26% of them had bullish expectations and 73% with bearish. A more accurate title would be "What Whales Are Betting On Microsoft: A Mixed Picture Of Bulls And Bears".
- The author uses vague terms like "significant investors" and "whale activity" without defining them or providing any evidence of their credibility, authority, or track record. This creates a false impression of expertise and objectivity, while hiding the underlying assumptions and biases of the source. A more transparent and precise way to write would be "Based on options history data from Benzinga Insights, we analyzed 15 trades by large investors who have a bearish stance on Microsoft, defined as those who bought puts or sold calls with a strike price between $310.0 and $510.0 in the last three months".
- The author does not explain how the predicted price range of $310.0 to $510.0 was derived from the trading activity data, nor does he/she provide any comparison or context for this range. For example, what is the current market price of Microsoft at the time of writing? How does this range relate to the historical volatility and trend of the stock? What are the main factors influencing the sentiment and expectations of these large investors? A more informative and analytical way to write would be "Based on the trading activity data, we estimated a predicted price range of $310.0 to $510.0 for Microsoft over the next three months, assuming a normal distribution of returns and a confidence interval of 68%. This range is within two standard deviations from the current market price of $420.0, which indicates a moderate level of uncertainty and risk. The predicted price range also reflects the mixed sentiment of bullish and bearish large investors, who may have different reasons and strategies for their trades".
- The author does not provide any insight into the volume and open interest development of Microsoft's options, nor does he/she relate them to the liquidity and interest of other market participants. For example, how does the volume and open interest of Microsoft's calls and puts compare to those of other stocks in the same sector or industry? How does this data affect the pricing and valuation of Microsoft's options? A more insightful and comparative way to write would be "Looking at the volume and open interest of Microsoft's calls and puts, we observed that they increased significantly over the last 30 days, indicating a high level of
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