Dan Deming's Microsoft Options Trade

On Bloomberg Markets, Dan Deming of KKM Financial suggested that traders should consider an options strategy in Microsoft Corporation (NASDAQ: MSFT), ahead of earnings results.

The company is going to report earnings on Thursday and Deming wants to sell the July 74.50 call and buy the August 74.50 call for a total cost of 26 cents. He believes that front month implied volatility is going to collapse and the July call is going to lose value, if the stock stays in the range. He also thinks that the August call is going to hold its value.