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MS Stock Replacement Example

|Includes: Morgan Stanley (MS)

MS Current Price $23.03 (April Expiration)

Buy 23 Call - $1.04

Sell 24 Call - $.58

Sell 22 Put - $.60

a) You will be paid $.14 to initiate this spread

b) You can participate in the upside from $23-24 (+) $.14 received = $24.14

c) You will not experience a loss in this trade unless MS falls below $22(+) $.14 received = $21.86

d) This method will still profit $.14 even if the shares fall to $22.01, whereas owning the stock will produce a loss from $23.03 all the way down to that point.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.