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May 14, 2012  Mon 3:34 AM CT

WMB: SEE CHART GET CHAIN FIND STRATEGIES
A huge put spread topped Friday's option activity in Williams Company, but it doesn't appear bearish.

More than 21,000 each of the June 32 and 26 puts changed hands in unison on Friday, according to optionMONSTER's systems. A trader sold the 32s for the bid price of $0.86 and bought the 26s for the ask price of $0.09. The previous open interest were 1,049 and 0 respectively, so this was a new opening credit spread. (See our Education section)

If WMB remains above $32 through expiration, the trader would keep the credit of $0.77  as profit. If the stock trades below $26, the position could lose $5.23.

WMB finished Friday at $32.54, gaining a penny on the day but lower on the week. The natural-gas pipeline company traded at a four-year high of $34.63 on the first of the month.
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In our last column, we spoke about delta. You might remember that we discussed what delta was and what factors affected or changed delta. As you recall, we stated that three factors will have an effect on delta. They were movements of time, volatility, and underlying price. Today, we want to take a further look into the change of delta, this time focusing on change due to the movement in the underlying price. 

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