Of course, we'd all like to see a beat (I'm counting on the probability of a beat, as you will soon see). Even if you don't own shares of Microsoft personally, you might own an index fund and/or an actively-managed fund that holds a good chunk of shares. It's been tough out there. Last quarter, the software giant was only able to meet expectations. And revenues were down. Also, in the quarter before that, Microsoft missed Wall Street's outlook.

Well, I actually bought Microsoft this week as an earnings trade. I purchased some shares on Monday at $24.32. As of Tuesday's closing price, Microsoft was trading at $24.83. In Tuesday's after-hours session, shares were up another 10 cents to settle at $24.93, but they were down again in early trading today.

Why did I put real money down on Microsoft? Quite frankly, it could be a risky bet. The reason I did it is exactly the same reason why buying Microsoft now is so risky: the price action has been very strong with the company's stock. And if you look at how the market reacted after the Q3 report, one which wasn't so great in many respects, then you have to believe that Microsoft might be a decent earnings play. Consider that Microsoft closed yesterday at the high. That might be a positive technical indicator for what's to come this week. And I should say this: I'm only looking for a dollar gain here. Once Microsoft hits $25.32, I'm out. It might even happen today (I hope it does!).

Now, what if Microsoft heads south either just before or after the Q4 release? Well, I'm not so worried. I might add to the position, improve the cost basis. I might then sell covered calls against it to try and juice the return a little (I did that successfully earlier in the year). I'd be comfortable getting stuck with Microsoft; well, maybe not 100% comfortable, I hope nothing severe happens that might cause the stock to drop like a rock, but you know what I mean: I'd be able to take a decline of a dollar or two in the share price.

For those who aren't trading Microsoft and are holding for the long term, I'm sure everything will turn out reasonably well. Annual cash flow should be decent enough. I hope to hear about plans for the Xbox 360 in the upcoming fiscal year. An update on the new search asset Bing will be nice. Most importantly, though, shareholders will want to see that management is operating the company as efficiently as possible to keep the recession at bay.

We'll see what happens. I've got my fingers crossed: come on, $25.32!

Disclosure: I own Microsoft; positions can change without notice.