Scott Nations Is Bearish On Morgan Stanley (MS)

Scott Nations said on CNBC's Fast Money that he is worried that banks might post disappointing earnings results, and he wants to protect his portfolio against that. He wants to use an options strategy to protect from the possible downside in Morgan Stanley MS, and his strategy is a purchase of a put spread. Specifically, Scott Nations wants to sell the January 22 put for $1.90, and buy the January 25 put for $1.10. This strategy would generate $0.80, and the maximal profit with this trade is $2.20 which happens at or below $22. Morgan Stanley (MS) fell 3.71% today, and closed at $25.67.