Traders were nibbling a little bit on brokerage firm options Monday as some of Wall Street's marquee investment houses are slated to report first-quarter earnings this week.

While impending earnings typically spark vibrant options action, the volume in those options was light as it appeared few players were willing to make big bets ahead of tomorrow's decision on interest rates and ahead of earnings.

Shares of investment banks

Goldman Sachs

(GS) - Get Report


Morgan Stanley Dean Witter



Lehman Brothers



Bear Stearns


advanced, as all are slated to post earnings this week. The prices of the options in Goldman and Morgan seem to be reflecting investors' uncertainty about where those earnings will land.

Not hurting the sector in general were upgrades of Goldman, Morgan and

Merrill Lynch


by Lehman analyst Mark Constant. Merrill is not reporting earnings this week.

Goldman rose $1.45 to $89, Morgan Stanley gained 93 cents to $58.85 and Bear Stearns rose 66 cents to $47.40, while Lehman advanced 60 cents to $67. Merrill added $1.51 to $56.30.

Shares of brokerage stocks got hammered last fall and bottomed out early in December. The stocks staged a nice rally lasting into early February, but that advance fizzled and it's been tough sledding for those stocks ever since. However, in the past week or so, shares of brokerage stocks have stabilized and turned a bit higher.

Perhaps one of the reasons volume wasn't as robust as usual in brokerage options is tomorrow's meeting of the

Federal Open Market Committee

, in which the panel is expected to lower its target for short-term interest rates.

There were some small call buyers in Goldman options, said Tim Keller of

Beartooth Capital

, the designated primary market maker in Goldman options at the

Chicago Board Options Exchange


Prices for Goldman options and other brokerage firm options have risen over the past month.

Implied volatility (a key component of an option's price and the market's estimate of how much the underlying security can move) for at-the-money Goldman options expiring in April was 68, up from a month ago level of 51, said Paul Foster of

in Chicago. Generally, implied volatility rises ahead of a company's earnings, reflecting the uncertainty of the direction of the stock ahead of the announcement.


First Call/Thomson Financial

14-analyst consensus estimate calls for Goldman to earn $1.29 a share in the first quarter. Goldman is slated to post earnings tomorrow.

On the

Pacific Exchange

, 300 of the July 90 calls traded, up 0.50 ($50) to 11.30 ($1,130), compared to open interest (the total number of options contracts that have not been exercised or allowed to expire) of 211 contracts, suggesting the trade there was the initiation of a new position.

Elsewhere, there was light trading in Morgan Stanley options. The prices for the options have risen markedly over the past month. Implied volatility for Morgan Stanley April 60 options was 69 this morning, compared to 49 a month ago, Foster said.

The First Call 15-analyst consensus estimate calls for Morgan Stanley to post earnings of 93 cents a share. The investment bank is slated to report earnings Wednesday.