Cautious optimism in Williams trades

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Williams has been a favorite among big investors seeking exposure to natural gas, and yesterday they gingerly returned to the name.

optionMONSTER's Depth Charge tracking system detected the purchase of about 15,000 September 20 puts, most of which priced for $0.60 to $0.69, against open interest of just 1,029 contracts.

While normally bearish, the put buying appeared bullish because WMB rose as the transactions crossed and stayed positive for the entire session. That suggests investors were buying the stock and using puts as downside protection. (Similar activity occurred in Activision Blizzard in the preceding session.)

WMB rallied into yesterday's close, finishing up 12 percent at $27.03. The stock appears to have found support around the same $24-$25 area that was resistance in April and December of 2010, which could lead some chart watchers to believe that the uptrend remains intact.

The company's last earnings report on Aug. 3 slightly beat forecasts as energy production increased by 9 percent.

Puts outnumbered calls by about 2 to 1 yesterday.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: WMB

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