Morgan Stanley Stock Slumps After Profits Drop

A year-over-year drop in profits is weighing on the shares

Deputy Editor
Oct 18, 2023 at 10:26 AM
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The shares of Morgan Stanley (NYSE:MS) are down 6.4% at $75.20 this morning, after the firm joined other major banks in reporting third-quarter earnings. Profits of $1.38 per share on $13.2 billion in revenue beat expectations, but the former was 9% lower year-over-year amid a slump in wealth-management asset flows, which is weighing on MS.

Right out of the gate, options traders are placing their bets. Within the first hour of trading, 34,000 calls and 41,000 puts have already exchanged hands, volume that's nine times the typical intraday amount. Most popular is the December 60 put, follower by the October 75 put, with new positions opening at both.

Today's drop puts Morgan Stanley stock at its lowest level since October 2022, a far cry from its Feb. 14, year-to-date peak just shy of $101. Now down 11.4% in 2023, shares are also carry a 22% year-over-year deficit.

A broader look at options activity shows traders were more bearish than usual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MS' 10-day put/call volume ratio of 1.53 ranks in the 87th percentile of readings from the past year. This indicates bearish bets have been growing in popularity and outpaced calls over the last two weeks.




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