Morgan Stanley

Morgan Stanley Electronic Trading Expands Its Advanced Suite of Electronic Options Trading Strategies

Jun 24, 2009

New York —

Morgan Stanley Electronic Trading (MSET) today announced enhancements to its advanced suite of electronic options trading strategies.  Its new offering will allow clients to more effectively trade U.S. listed options and better navigate the options space.  In particular, MSET is offering clients access to Morgan Stanley's sophisticated Options Smart Order Routing Technology (OSORT), its new stealth options order types and algorithmic trading strategy, and its new automated delta hedging tool.  Morgan Stanley also recently provided access to its options offering through Bloomberg's Execution Management System, EMSX.

Morgan Stanley's OSORT optimally routes orders to multiple options market centers, taking into consideration a number of factors such as, among other things, price, available liquidity, speed and execution quality. 

In addition to its exchange directed order type, MSET is offering its clients two new order types meant to assist them in maintaining anonymity when maneuvering through the marketplace.  The stealth reserve order allows a client to display a portion of the order at a given price and keep the remainder of the order in reserve while OSORT searches for liquidity within the client's specified limits.  The stealth hidden order is a fully non-displayed order that can be used by clients to search for liquidity while remaining completely anonymous.  MSET is also offering a new TWAP options algorithm to those clients who want to evenly spread out their options executions over a specified time period. 

"We are always looking for new ways to provide more efficient means for our clients to electronically trade their options orders," said Andrew Silverman, Managing Director and Co-Head of Morgan Stanley Electronic Trading.  "In response to our clients' needs, we have not only updated our existing trading tools, but have created new ones and have added them to our options offering."

MSET has further developed an automated delta hedging tool to expand upon the options trading capabilities of Morgan Stanley's proprietary front-end application, Passport.  The new functionality includes volatility trading with automated delta adjusted limit price updates, delta neutral trading with an automated cash hedge calculation and execution, and conditional orders based on price stops and liquidity thresholds.

Morgan Stanley clients currently have the ability to route their U.S. listed options orders to Morgan Stanley's advanced electronic options trading strategies through many different order and execution management systems.  More recently, through an arrangement with Bloomberg, clients can leverage their existing Bloomberg EMSX access to route their U.S. listed options orders to Morgan Stanley at no additional cost.  

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services.  The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 36 countries.  For further information about Morgan Stanley, please visit www.morganstanley.com.

Media Relations Contact: Mary Claire Delaney, 212.762.6880