Morgan Stanley (MS) is up 62 cents to $16.30 and Sep 17 calls on the investment bank are today’s most actively traded options contract. More than 109,000 traded, including a 50000-contract block sold this morning at 13 cents per contract and another 10,000 sold midday at 16 cents. Sep 17 calls on MS were apparently being sold yesterday as well. The flow created 30,250 contracts of new OI. Total open interest in the Sep 17 call is 144,762 and now the largest block in MS options. Today’s flow is likely to add to the OI and seems to express the view that a move beyond $17 (~4.3%) isn’t likely through the Sept expiration (15 days). The activity might be part of over-writing on the stock. 30-day ATM volatility in MS options is falling 13 percent to 36 today and at the lower end (5th percentile) of the 52-week range (32 – 133.5).
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.