Trade looks for Williams to break out

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Williams is fighting its way toward resistance, and one bull expects a breakout. WMB

optionMONSTER's Heat Seeker tracking system detected the purchase of about 50,000 January 25 calls for about $0.70 and the sale of a matching number of January 27 calls for $0.25. The trade resulted in a net cost of $0.45.

WMB rose 0.72 percent to $23.89 in afternoon trading, and is up 24 percent in the last three months. The natural-gas company has been the target of several bullish options trades in recent months as it consolidates around the same level where it traded immediately before the May 6 Flash Crash.

Today's option strategy, known as a bullish call spread, will earn a maximum profit of about 340 percent if WMB closes at or above $27 on expiration. It hasn't traded that high since September 2008.

The trade pushed total options volume in the stock to 10 times greater than average, calls accounting for a bullish 95 percent of the activity.

(Chart courtesy of tradeMONSTER)



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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