The bulls are looking for a rally in Morgan Stanley as it consolidates slightly below its 200-day moving average.
Our Heat Seeker tracking program detected the purchase of more than 14,000 March 20 calls for $0.61 to $0.65 against open interest of just 2,102 contracts. These long calls lock in the price investors must pay for the brokerage stock in the next two months, so if it rallies they could easily double or triple in value. (See our Education section)
MS rose 2.47 percent to $18.65 yesterday and is up 23 percent in the last month. It gapped higher on Jan. 19 after earnings and revenue beat forecasts, but since then shares have been moving sideways.
The call buying reflects a belief that shares will continue to run higher in the near term and comes amid improving sentiment in the financial sector. In addition, Morgan Stanley is reportedly the lead underwriter of Facebook's initial public offering.
Overall option volume in the name was more than twice its daily average, with calls outnumbering by more than 2 to 1.
(A version of this post appeared on InsideOptions Pro yesterday.)
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