Options Trading News

December 27, 2012  Thu 2:14 AM CT

Williams Companies has been trying to recover from losses a few months ago, and one trader is betting that the energy firm will largely hold recent support.

optionMONSTER's tracking systems detected the sale of 2,000 May 30 puts for $1.33 yesterday. The volume was more than 4 times higher than the strike's open interest of 476 contracts at the beginning of the day, so this is clearly a new position.

WMB slipped 0.74 percent yesterday to close at $32.29, apparently facing resistance around $33. Shares of the natural-gas pipeline operator are well off their 52-week highs above $37 reached in October but are trying to rebound from support at the $31 level.

Yesterday's put sale is looking for Williams to close above the $30 strike price upon expiration in mid-May 2013. If shares are below that level at that time, the trader faces the obligation to buy the stock at an effective price of $28.67 once the credit from the put selling is factored in. (See our Education section)

Total option volume in WMB yesterday was nearly double its daily average in the last month. Calls outnumbered puts by 7 to 1 yesterday, a reflection of the session's positive sentiment.
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