MSFT Covered Call: Oct 26 $540 Call

Microsoft Corp (MSFT). Option quotes as of Oct 16, 2026, 4:00 PM ET. Stock prices are closing prices.

Buy 100 shares at $529.05. Sell 1 Oct 26, 2026 $540 call for $3.25, the bid.

Premium at the bid: $325
Delta: 0.29
Return if stock unchanged: 0.62%
Return if shares called away: 2.70%
Breakeven: $525.80

Earnings Oct 28 (expected), 2 days after this expiryFOMC Oct 28, 2:00 PM ET

Oct 26 expiry, 7 days out (weekly). Shortened to 7 days to finish before earnings on Oct 28 (expected). This is a screen result that fits CFU's rules. It is not a recommendation to trade.

Open MSFT in the interactive scanner Cash-Secured Put on MSFT

Daily prices for MSFT from Apr 17, 2026 to Oct 16, 2026. Over that time it closed between $352.83 and $543.45. The $540 strike is 2.1% above the current price of $529.05. The breakeven is $525.80. By Oct 26, 2026, the options market is pricing a range of about $507.72 to $550.38, with about 2 in 3 odds of finishing inside it. That is an estimate, not a prediction. No event markers fall between today and expiry.

Profit and loss at expiry

The chart shows the profit or loss at expiry for 100 shares of MSFT bought at $529.05 and the $540 call sold at the $3.25 bid. The most it can make is $1,420, at any price at or above $540. It breaks even at $525.80. Below that, it loses $100 for each $1 the stock falls, up to $52,580 if the stock went to zero. For comparison, owning the shares alone gains or loses $100 for each $1 move, with no cap on the gain. The Today line estimates what the position is worth now at each price, from the Black-Scholes model. It is an estimate, not a prediction.

Why this covered call

Why this expiry

CFU's rules chose the Oct 26 expiry, 7 days out.

That is shorter than the usual 21 to 45 days. It is shortened to 7 days to finish before MSFT's earnings on Oct 28 (expected).

A call this short loses value faster and swings harder with the stock. The rules accept that to finish before the report.

With the stock unchanged, a call 21 to 45 days out loses about 3 to 6 percent of its value a day, and its strike sits further from the stock.

Those decay figures are model estimates from Black-Scholes at 30% implied volatility, not predictions.

For this call, the options data puts the decay at about $0.39 a share a day, 10.3% of its value, with the stock unchanged. That is a model estimate, not a prediction.

CFU's rules look for expiries 21 to 45 days out and aim for about 35. They take the monthly when it fits.

They go under 21 days only to finish before an earnings report, and never under 7 days.

Why this strike and delta

The $540 call has a delta of 0.29.

CFU's rules sell a call with a delta between 0.20 and 0.30, as close to 0.25 as a liquid strike allows.

Among the strikes in that band, the rules keep the ones that pass the liquidity checks and take the one closest to 0.25.

No liquid strike on this expiry sat nearer 0.25, so this is the closest liquid strike to 0.25.

Below 0.20 the premium gets thin. Above 0.30 the strike sits close to the stock, and your shares are more likely to be called away.

Near 0.25 the strike leaves room for the stock to rise and still pays a real premium.

Delta is a market-implied estimate drawn from option prices.

The options market prices roughly a 71% chance MSFT finishes below $540 at expiry. That is an estimate, not a prediction.

Earnings

MSFT is expected to report earnings on Oct 28, 2 days after this option expires.

The date is an estimate, and companies sometimes report earlier than expected. Check the date before you trade.

The rules shortened the trade so it finishes before the report.

Macro events before expiry

No scheduled FOMC, CPI, jobs, PCE or GDP releases fall inside this trade.

Dividends and early assignment

MSFT's next declared ex-dividend date, Nov 19, 2026, falls after this expiry.

Liquidity

The bid is $3.25 and the ask is $4.30, a spread of 27.8% of the midpoint. On closing prices CFU's rules allow up to 30% of the midpoint, or 10 cents on a low-priced option, because spreads widen at the close.

Open interest, the number of these contracts already open, is 272. The rules need at least 100.

The rules also need a bid of at least $0.05.

Your risk

You still own 100 shares. If MSFT falls, you lose on the shares.

The $3.25 premium cushions only the first $3.25 of a drop.

Below the $525.80 breakeven, the position loses $100 for each $1 the stock falls.

If the stock went to zero, you would lose $52,580.

Your upside is capped

Your upside is capped at the $540 strike. If MSFT is above $540 at expiry, your shares are sold at $540.

You keep the premium, but you miss any gain above that price.

Measured from today's prices, the most this trade can make is $1,420.

How the numbers are priced

Every figure on this page uses the $3.25 bid, the price you could sell at when the quote was taken.

The example order starts at $3.75, the midpoint of the bid and ask rounded down to the option's price step, and walks toward the bid.

MSFT call strikes for Oct 26

Every listed strike near the money for the same expiry, priced at the bid. The highlighted row is the one CFU's rules chose. Closest liquid strike to 0.25 delta.. Grey rows fail a liquidity check.

Strike	Delta	Bid	Ask	From price	Premium (1 contract)	Breakeven
$495	0.84	$34.15	$37.00	6.4% below	$3,415	$494.90
$500	0.81	$29.65	$32.05	5.5% below	$2,965	$499.40
$505	0.78	$25.20	$28.10	4.5% below	$2,520	$503.85
$510	0.74	$20.70	$23.50	3.6% below	$2,070	$508.35
$515	0.69	$16.85	$19.35	2.7% below	$1,685.00	$512.20
$520	0.62	$13.45	$15.55	1.7% below	$1,345	$515.60
$525	0.55	$10.00	$12.00	0.8% below	$1,000	$519.05
$527.50	0.51	$8.55	$10.30	0.3% below	$855.00	$520.50
$530	0.47	$7.40	$9.10	0.2% above	$740	$521.65
$532.50	0.42	$6.15	$7.45	0.7% above	$615	$522.90
$535	0.37	$4.50	$6.00	1.1% above	$450	$524.55
$537.50	0.33	$4.15	$5.30	1.6% above	$415.00	$524.90
$540 (CFU rule)	0.29	$3.25	$4.30	2.1% above	$325	$525.80
$542.50	0.25	$2.50	$3.55	2.5% above	$250	$526.55
$545	0.21	$2.13	$2.94	3.0% above	$213	$526.92
$547.50	0.16	$1.00	$2.25	3.5% above	$100	$528.05
$550	0.15	$1.15	$1.97	4.0% above	$115.00	$527.90
$552.50	0.12	$0.01	$2.25	4.4% above	$1	$529.04
$555	0.10	$0.65	$1.40	4.9% above	$65	$528.40
$557.50	0.09	$0.44	$1.25	5.4% above	$44	$528.61

Example order

I don't own the shares yet

BUY 100 MSFT / SELL TO OPEN 1 MSFT 10/26/26 540.00 CALL
LIMIT: $525.28 net debit (mid)
If not filled: raise $0.01 every 2 min
Ceiling: $525.80 (stock price − call bid). Don't pay more.

This is a buy-write. One order buys the shares and sells the call together.

I already own 100 shares

SELL TO OPEN 1 MSFT 10/26/26 540.00 CALL
LIMIT: $3.75 credit (mid)
If not filled: lower $0.05 every 2 min
Floor: $3.25 (bid). Don't sell for less.

Prices are from Oct 16, 2026, 3:59 PM ET. Recompute from your live quote: start at mid, walk toward the bid, never past it.

Before you sell, ask

Am I happy selling MSFT at $540?
Am I happy holding it below $525.80?

These are the two questions CFU asks before any example, for every ticker. If either answer is no, this is not the trade for you.

Other expirations for MSFT

Open one in the interactive scanner to see its strikes, chart and order example.

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