Options Trading News

Morgan Stanley is on pace for its lowest close in eight months, but one large trade is looking for a floor beneath the stock.

MS is down 2.33 percent, trading at $13. The investment bank has fallen sharply in the last two months, having traded above $21 in late March. It is on pace for the lowest close since Oct. 3, when it put in a three-year low.

More than 11,000 June 12 puts have traded, with the largest block of 8,300 sold for the bid price of $0.52. The total volume was more than twice the previous open interest.

optionMONSTER's systems also show that more than 11,000 July 11 puts have traded, but this volume was in small blocks throughout the morning and below open interest of 12,037, so it does not appear to be directly tied to the trading in June.

The put selling is a bet that the $12 level will hold in coming weeks. The trader may be interested in buying shares and is using the short puts to get a premium in the process. If this trader is assigned and obligated to buy stock, he or she will do so for an effective price of $11.48.  (See our Education section)