For a hedged play on Morgan Stanley (MS) MarketIntelligenceCenter.com’s algorithms selected the Jul 20, 2018 $52.50 covered call for a net debit in the $51.32 area. That is also the break-even stock price for the covered call. This trade will return 2.29%, or 13.11% annualized (for comparison purposes only), in 64 days. This covered call also provides 6.63% downside protection.
A lower-cost play on Morgan Stanley would use a longer term call option in place of the long position in the stock. Look at the Jan 18, 2019 $40 call and the same sold call for a net debit of $11.99.This trade only has 5.40% downside protection, but the assigned return rate rises to 4.16% or an annualized rate of 23.76% (for comparison purposes only).
The current 52-week low is $40.43 and the 52-week high is $59.38. Morgan Stanley stock has been showing support around $54.21 and resistance in the $55.54 range. The stock closed May 16, 2018's trading session at $54.97. Technical indicators for the stock are bearish and S&P gives MS a 5 STARS (out of 5) strong buy ranking.