OptionsHouse

Options Trading News

June 17, 2013  Mon 11:44 AM CT

WMB: SEE CHART GET CHAIN FIND STRATEGIES
A trader is apparently looking for lower volatility in natural-gas company Williams as shares near multi-month lows.

optionMONSTER systems show that 22,000 WMB options have changed hands already today, about twice the daily average in the last month. Most of that action is in one combination trade.

Blocks of 4,500 traded in the November 36 calls and 29 puts for $0.130 and $0.83 respectively, both apparently sold. A little more than an hour later, blocks of 4,700 went for $0.119 and $0.84 traded at the same strikes, also sold. Total volume was more than 10,000 contracts in each, far above previous open interest below 1,000 and therefore new activity.

This appears to be a short-strangle position, a bet that volatility will be lower going forward or at least that it will be lower than what is implied by the option prices. (See our Education section)

WMB trades at $33.48, up 0.51 percent this afternoon. Friday's close was just a tick above levels from mid-January, the stock's second lowest of 2013. Shares were up above $38 at 52-week highs in mid-April. 
Share this article with your friends


Related Stories

WMB

Williams gets vote of confidence

March 24, 2015

The pipeline stock has outperformed other energy names, and one investor sees limited downside risk in coming weeks.

Invest Like a Monster - San Diego: June 26-27

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Short Gamma

Last week, we talked about long Gamma. We said that long gamma is acquired by purchasing options and when you...

View more education articles »