If you hold the shares, you are already exposed to the full, sizable gap between two very different potential outcomes.
The options market sees two very different destinations for Microsoft (MSFT) stock a year from now: one near $280, the other near $565
From today’s price of about $396, that’s a potential 29% drop or a 43% climb. If you own the stock, you own the full breadth of that uncertainty, whether you’ve ever looked at an option chain or not. This is the risk you’re carrying right now.
Just How Big Is the Move Priced Into Your Shares? The number that captures this uncertainty is called implied volatility, and for Microsoft, it’s currently sitting at 37% for options expiring over the next year. Think of it as the market’s price tag on the size of the potential swing.