Unusual Options Activity in Morgan Stanley $MS

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Unusual Options Activity in Morgan Stanley MS
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• Hi, My name is Steve and Im with Options Trading
  Research, today were reviewing our recently
  published article

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• Unusual Options Activity in Morgan Stanley MS

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• As many of you know, unusual options activity can
  be a valuable indicator as to what traders are
  thinking, and more importantly, where these
  stocks are heading in the short-term.

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• This is something professional options traders
  pay a lot of attention to, and for good reason
  Unusual options activity can tip off big moves
  in a stock, either up or down.

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• So lets take a look at some interesting
  activity that caught our eye this week Morgan
  Stanley MS is one of the largest financial
  institutions in the world.

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• The 68 billion company provides institutional
  banking and wealth management services. For a
  good description of the company, follow the link.

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• MS is trading at 35.13, down 8 for the year.
  Thats 14 below the 52-week high, and 17 above
  the 52-week low.

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• So what does unusual options activity in MS tell
  us?

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• Like most companies in the financial sector, MS
  has had an underperforming year. Some of it is
  simply sector rotation that is, stock buyers
  have not yet rotated into financials this year.

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• Plus, low interest rates have certainly hurt the
  bottom line at many banks. However, MS has seen a
  surge in buying this month.

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• With the Fed highly likely to raise rates in
  December, investors are once again taking an
  interest in financial companies. Like many other
  banks, MS appears to be trading at a discount.

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• Heres the deal
• This week, a large amount of puts traded in MS
  options. Keep in mind, a put option makes money
  when the underlying stock goes down before its
  expiration date.

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• Conversely, selling a put option is beneficial
  when a stock goes higher or stays neutral. To be
  more specific, traders sold over 9,000 32.50 puts
  expiring on December 24th.

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• These puts were sold for 0.43, resulting in
  total collected premium of close to 400,000.
  The volume far exceeds the open interest, so this
  is definitely opening action.
• Heres the chart of MS

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• MS shares dropped well below the 50-day moving
  average during the August correction. The stock
  has just recently broken through that resistance
  and has shot all the way up to 35.

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• The share price only has to remain above 32.50
  by roughly the end of the year for the trade to
  be fully profitable. With the 50-day moving
  average sitting at 33, MS would have to break
  through significant support to get to the
  breakeven point.

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• The trader is likely assuming that banks are
  going to hold their ground with the December rate
  hike nearing.

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• Banks may not continue to rally, but the downside
  is probably limited given the benefit of higher
  interest rates on their bottom lines.

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• More Options Trading Ideas

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• Keep in mind, theres a lot more unusual options
  activity going on than what we discuss here. We
  just try to bring you what we feel are the most
  significant ones and the ones you might actually
  be able to make some money on!

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