Morgan Stanley (MS, news, chart, volatility) is down 50 cents to $27.50 and not far from session lows ($27.46). The stock is down 6.3 percent from its best levels of the trading session after Reuters reported that merger talks with Wachovia (WB) have now ended. In the options market, 26,000 MS puts have traded on the day, compared to 9,300 calls. The top trade of the day was an order for 5,000 October 10 puts traded bidside for 30 cents a contract on the PHLX, a customer sell order according to a source on the exchange and possibly on the view that, while things might seem bad, the stock isn’t likely to fall to below $10 a share by October options expiration (23 days).