Sometimes the best trades come on the choppiest days when others are hesitant to act. Our recent $MSFT put trade on August 18th demonstrated how recognizing technical shifts and managing risk effectively can generate solid returns even when broader markets are struggling for direction. This trade on the 515 puts expiring August 22nd showcased the importance of reading order flow and positioning ahead of momentum shifts.
When you combine technical analysis with options flow data and disciplined risk management, even short-term plays in volatile conditions can deliver consistent profits. This $MSFT position generated over 20% gains in just 37 minutes, proving that preparation and quick execution are essential when markets present opportunity.
The Setup
At 11:03 AM on Sunday, August 18th, I alerted the TW Elite community:
“Watching $MSFT 515P @everyone”
Just eight minutes later at 11:11 AM, we executed our entry:
“$MSFT BTO 22AUG25 515P at $3.64”
The timing was crucial with options expiring in just four days and SPY/QQQ showing choppy action. MSFT was displaying technical weakness and the options flow was telling a story – we had significant put buying in the September 26th 525 strikes, indicating institutional positioning for downside.
The Trade Plan
Immediately after entry, I established our risk parameters:
Stop: 518.5, or VWAP
Targets: 517.09, 515, 509.44
This structured approach gave us clearly defined profit zones and a logical stop level tied to both price action and the volume-weighted average price. With Friday expiration approaching, we needed MSFT to break its uptrend and follow through to the downside.
Reading the Technicals
At 11:21 AM, I provided crucial context to the community:
“$MSFT Loss of uptrend and starting to take out demand. It has the potential! Lots of MSFT 9/26 525P buyers today. Trimming and moving stops per usual. If SPY is able to take out the low today we may be in business..”
The technical picture was clear – MSFT was breaking its uptrend and beginning to take out key demand levels. Combined with the heavy put buying we were seeing in longer-dated contracts, the setup was gaining momentum.
Quick Profits and Risk Management
The beauty of this trade was in the rapid execution and disciplined scaling:
11:11 AM: First trim at $4.00 – securing a quick 9.9% gain in just minutes 11:36 AM: Second trim at $4.40 – capturing a solid 20.9% return on this portion
At 11:33 AM, I shared additional confirmation with the Net Options Delta reading:
“$MSFT Net Options Delta: -693K shares”
This negative delta indicated significant bearish positioning, supporting our directional bias.
Moving to Risk-Free
By 11:40 AM, just 37 minutes after entry, I updated the community:
“$MSFT Nice move so far, stops can be BE for risk free trade.”
This is the power of systematic scaling – we had already locked in profits and could now move our stops to break-even, essentially creating a risk-free trade for any remaining position.
The Close
By 3:30 PM, I provided the final update:
“$MSFT Continuing to move lower into the close. I am all out already but a couple targets below for those that plan on swinging. Glad to catch a little action on a very choppy day in SPY/QQU!”
Despite the challenging market conditions with choppy action in the major indices, our disciplined approach allowed us to capture meaningful profits while others struggled with direction.
Trade Results
This trade generated solid returns across both exit points:
Entry: $3.64 per contract
- Exit 1: $4.00 (+9.9%)
- Exit 2: $4.40 (+20.9%)
The scaled approach allowed us to capture profits quickly while managing risk effectively. Our highest exit represented over 20% gains in less than 40 minutes.
Why This Trade Worked
- Technical confirmation: MSFT broke its uptrend and began taking out demand levels
- Options flow insight: Heavy put buying in longer-dated contracts indicated institutional positioning
- Quick execution: Rapid scaling secured profits before market conditions could shift
- Risk management: Moving stops to break-even eliminated downside risk
- Market context: Recognizing opportunity even in choppy market conditions
Key Takeaways
This $MSFT trade demonstrates that some of the best opportunities come when markets are uncertain and others are hesitant to act. By combining technical analysis with options flow data and maintaining disciplined risk management, we were able to capitalize on a clear setup even in challenging conditions.
The key was not overthinking the trade but trusting the technical setup and options flow while maintaining strict discipline on our scaling plan. Quick profits and risk-free positioning allowed us to participate in the move without exposure to the broader market choppiness.
Remember: the best traders find opportunity when others see only confusion. Having a clear plan, reading the technical and flow data correctly, and executing with precision – that’s what separates consistent performers from the crowd.
On to the next!