Traders like Williams for the long haul
David Russell | [email protected]
optionMONSTER's Heat Seeker monitoring system detected the purchase of about 80,000 January 2014 40 calls for about $0.86. A similar number of January 2014 45 calls were sold for $0.16, and volume was more than twice the previous open interest at each strike.
The trade cost $0.70 to open and will earn a maximum profit of 614 percent if WMB closes at or above $45 on expiration one year from now. It's known as a bullish call spread because it leverages a move between two prices, in this case $40 and $45. (See our Education section)
WMB rose 1.08 percent to $33.80 yesterday. The natural-gas stock has steadily trended higher since early 2009 and delivered many winning trades on the long side. Option activity has picked up again this month and already saw large bullish trades on at least two other occasions.
Total option volume was 10 times greater than average in the session, according to the Heat Seeker. Calls outnumbered puts by 52 to 1.