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February 12, 2013  Tue 9:24 AM CT

WMB: SEE CHART GET CHAIN FIND STRATEGIES
Shares of Williams Companies are slipping today, but one large trader apparently believes that the energy infrastructure company will stay range-bound.

optionMONSTER systems show that a trader sold 5,000 January 2014 30 of those puts for $1.68. The volume was quadruple the strike's open interest of 1,228 contracts at the beginning of the day, so this is clearly a new position.

Less than a minute later, a print of 150,000 WMB shares was sold for $35.50. The combination of stock and short puts would make for a delta-neutral position that is looking for lower volatility and for shares to stay range-bound. (See our Education section)

WMB is down 0.8 percent this morning to $35.45. The stock ended Friday's session at $36, its highest close since the 52-week high in mid-October. Shares were down at support at $31 in mid-December and have been climbing since.
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When using the Stock Replacement Strategy, we must remember that in reality, we are doing a STOCK trade. We are just using options. We are replacing the stock position with an option position (long calls).

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