Morgan Stanley named exchange operator Cboe Global Markets a top pick, noting the stock would benefit from the volatility that typically accompanies the final months of a bear market. Analyst Michael Cyprys has an overweight rating on the stock along with a price target of $150, which reflects a 26.5% increase over where it closed Monday. He noted that a recent decline makes for an attractive entry point given the stock's growth potential. "We see Cboe as a defensive beneficiary against a more challenging macro backdrop as elevated market volatility should support the outlook for trading volumes," he said in a note to clients. Cyprys said performance should be good because Cboe's index options franchise – which allow investors to trade across an index rather than just specific stocks – will continue benefiting from increased engagement and market volatility. Morgan Stanley expects that volatility will define the next year with earnings estimates still "materially too high." Cboe operates four exchanges and is known for its early moves on emerging markets such as options. It's had the first listed-options marketplace; the first alternative platform for traditional equity markets; the first multilateral trading facility for Europe; and the first electronic communications network for the foreign exchange market, according to its website. He pointed to data showing S & P 500 options and total index options were up 88% and 75%, respectively, in October compared to the prior year. Average daily value in contracts in the third quarter grew 67% compared to last year. Increased short-dated options and trading behavior shifts to macro-level hedging should also both help drive business, Cyprys said. The focus on shorter-term strategy gives the company's transactional revenues, which Cyprys noted accounts for 70% of the total firm's, to have growth potential and the ability to see upwards estimate revisions. To be sure, he said the company's performance could be impacted if market volatility is meaningfully different than what is expected or if there are notable changes to the market that change investor strategy away from short-term movements. "The index options franchise continues to benefit from increased engagement, elevated volatility, and new product innovations that drive volumes to new records," he said. — CNBC's Michael Bloom contributed to this report.