Morgan Stanley FX loss leaves ill-feeling, questions in wake

Options traders saw odd quotes by US bank months before losses were publicised

Traders caught in the wash from Morgan Stanley’s ill-fated options trades last year are trying to piece together the events that led to a reported $170 million loss for the US bank, and upended Turkish lira options books across the Street.

Based on a series of options trades that started around March – at prices that surprised other traders – the US bank is believed to have been trying to manage a complex and highly illiquid underlying position. In the weeks that followed, those options trades