Williams has been grinding higher, and the bulls deployed a
leveraged strategy late yesterday morning.
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 2,500 November 37 calls for $0.72. Equal-sized blocks
were sold at the same time in the November 34 puts for $0.34 and
the November 39 calls for $0.19. That translates into a cost of
The investor stands to collect $2 if WMB climbs to $39 by
expiration four weeks from now--a profit of 950 percent from the
shares advancing less than 8 percent. The trader is also obligated
to buy the pipeline stock for $34 if it's below that level on
expiration, though he or she might be willing to do that because
the price would bet at the lower end of its recent trading range.
The strategy combines a
. (See our
section for other ideas on how to generate big leverage from modest
WMB fell 0.19 percent to $36.17 yesterday. While it's lagged the
broader market in the last year, its 6 percent gain in the last
three months is almost twice that of the S&P 500 during the
same time. The stock has also been finding support above its rising
50- and 200-day moving averages, which could make some chart
watchers expect continued gains.
Third-quarter results will be released on Oct. 30 after the closing
bell. Williams also saw
short-term call buying
last week as investors looked for an earnings rally.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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