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Microsoft's post-earnings surge ends the binary risk. Mike Khouw says the trade has not closed.

7/31/2026

Microsoft (MSFT) shares surged following the company's fourth-quarter earnings, with record-setting appreciation wiping out the immediate binary event risk that had defined the stock's setup into results.

Commentator Mike Khouw contends a profitable path in Microsoft remains open, even after the move.

What the resolution of event risk changes Ahead of any major earnings report, a stock like Microsoft carries a specific form of directional pressure: the outcome is unknown, options pricing reflects that uncertainty, and traders who want to avoid a binary loss often stay flat.

The Q4 print resolved all of that. Record appreciation following the announcement signals the market registered a positive result and moved decisively. For investors who sat out the event, the shift is meaningful.