By Mike Yamamoto of OptionMonster

NEW YORK -- Financials have held up through this latest market downturn, and on Thursday option traders were banking on Morgan Stanley (MS - Get Report) . 

OptionMonster's tracking programs detected the purchase of about 7,800 December 35 calls for $1.17. The volume dwarfed the strike's previous open interest of 176 contracts, which indicates that new money was put to work. 

These long calls lock in the price where investors can buy stock in the investment firm, allowing them to bet on a rally with limited cost. That can be especially useful given the volatility in the broader market because only the price of the options is at risk if shares fall. 

Morgan Stanley rose 0.94% to $34.28 on Thursday but has pulled back from a six-year high of $36.44 reached two weeks ago. Shares are trying to hold support above their 50-day moving average, which could make some chart watchers expect the bullish momentum to return. 

The company is scheduled to report earnings on Oct. 17. Thursday's total option volume in the name was well above average, with calls outnumbering puts by almost 3 to 1. 

Yamamoto owns MS bonds.

 

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.