What's behind big call sale in Williams
Chris McKhann | email@example.com
The natural-gas pipeline operator is up 0.25 percent to trade at $29.01 even with the S&P 500 in negative territory. Two weeks ago WMB was below $28, just above its 2012 lows from the first days of the year. Shares hit a 52-week high of $34.63 at the start of May.
More than 11,000 WMB options have changed hands already today, 3 times its full-session average in the last month. Almost all of the volume is in one print in the August 30 calls.
A trader sold 10,000 of those calls for the bid price of $0.50, optionMONSTER's systems show. The volume was 4 times the open interest in that strike at the start of the day, so it is a new position.
The calls may have been sold naked in a trade with an initial bearish bias. That position could ultimately profit with shares anywhere below $30.50 at expiration.
They could also have been sold against shares as a covered call, the most widely used option strategy. That would take a maximum profit with shares at or above $30 at expiration but would not take further gains with the stock above the strike price. (See our Education section)