Anatomy of an asymmetrical position regarding Microsoft: Calls regarding MSFU

Background of the operation

Why I bought in on May 4 and not before the earnings report

In my Analysis of Microsoft Corporation ($MSFT) I explained in considerable detail why I believed the market was making a fairly clear misinterpretation. The correction of nearly 25% from the highs of July 2025, which drove Microsoft from around $555 to the $356 range by the end of March, did not reflect any real fundamental deterioration. It reflected fear.

It is important to specify the timing, because this is exactly where the logic of the operation lies. The Q3 FY2026 results were released on April 29th., So when I opened the position on May 4th the numbers were already on the table. I didn't go in speculating on what earnings would say. I entered buying the market's reaction to results it was already expecting, and that reaction seemed to me, quite simply, irrational.

Azure had accelerated to 401Q3 in constant currency compared to 311Q3 the previous year, the operating margin had exceeded the company’s own guidance, the AI business was on an annualized run rate of ~$37 billion, growing 123% year-over-year, and CAPEX for the quarter had even come in below consensus estimates. Objectively speaking, these were solid results. And yet, the market continued to sell the stock, fixated on the psychological impact of the guidance from ~$1.9 billion in committed capital expenditures for the fiscal year.

Position structure

Why MSFU and not direct options on MSFT?

The decision to express convexity through MSFU and not through direct options on MSFT was also not accidental. MSFU replicates approximately 200% of Microsoft's daily movement, which means that, under conditions of a sustained uptrend, the call’s delta expands much more rapidly. An option that starts with a delta of approximately 0.30–0.35 can rise to 0.50, 0.65, or even 0.80 in a matter of weeks if the underlying asset enters a phase of more aggressive repricing.

It is important to understand that these types of products are not designed to be held indefinitely. The true cost of leverage lies not only in the ETF’s management fee, but also in the decay from daily rebalancing and compounding, which in sideways or highly volatile markets erodes value even if Microsoft remains stable. That is why they fit so well with a thesis like this one, which does not depend on waiting years for a slow expansion of multiples, but rather to capitalize on a rapid repricing driven by catalysts on the horizon.

Transaction chart

MSFU 1H — Position Window: May 4 → June 1, 2026

Catalysts that validated the thesis

The four events that confirmed the reading on May 4

This argument did not arise out of thin air. Over the past few weeks, a series of specific factors have emerged that, one after another, have validated the assessment made on May 12 and explain why Microsoft regained ground so quickly.

Partial closure

Realization of gains and risk-free residual position

The June 1, 2026, with MSFU already clearly trending and Microsoft’s price movement confirming the structural direction outlined in the thesis, I closed the half the position, at a price of $7.90, compared to the entry price of $3.70 on May 4. That half alone closed with a return of nearly +113,51% on the inverted yield curve, over a period of about 28 days.

Having executed half of the contracts, I have more than recouped the entire premium invested in the full position, so that The 250 open contracts I hold are, in terms of risk, essentially hedged. The initial capital has already been recouped and is secure; from here on out, it’s all profit. This allows me to maintain a convex exposure to any potential upside that may still lie ahead—linked to the July Q4 FY2026 earnings report and other catalysts—without risking a single euro of the original investment.

It is worth emphasizing that the thesis on Microsoft remains intact. Azure’s acceleration, the gradual monetization of Copilot Enterprise, and the CAPEX cycle—which the market still views with some skepticism—continue to be the same arguments I outlined on May 12. July’s Q4 FY2026 will continue to act as a significant catalyst. Only half of the options layer has been executed; the other half remains active, capturing upside without added risk.