How the bulls are playing Williams


Shutterstock photo

Williams has been ripping amid an emerging bull market in the natural-gas sector, and investors continue to look for more upside.

optionMONSTER's Heat Seeker tracking system detected the purchase of 11,000 January 40 calls for $0.64. There was also a bullish vertical spread, with 2,000 August 32 calls bought for $1.47 and an equal number of August 35s sold for $0.65. That resulted in a net cost of $0.82, and will earn a 144 percent profit if WMB rallies to $35 by expiration.

The shares are down 0.33 percent to $30.16 in afternoon trading but have surged 63 percent in the last six months. That includes a gap higher that occurred on Feb. 17 after management announced it would split its production and pipeline businesses into two separate businesses.

The company, which has traditionally carried a heavy debt load, fell sharply during the 2008 financial crisis, but has been fighting its way back as credit conditions improve. It's also been riding a wave of bullishness in the natural-gas sector, especially as the market anticipates increased production.

Overall options volume in WMB slightly below average so far today, but calls outnumber puts by 7 to 1--a reflection of the bullish sentiment. The stock has been a frequent target of call buying for months.

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

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

This article appears in: Investing , Options

More from optionMONSTER




Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by