A huge trade is betting that Williams is headed back to levels
it hasn't seen since before the fall of Enron.
optionMONSTER's Heat Seeker tracking system detected the purchase
of 75,000 October 36 calls for $0.57 and the sale of an equal
number of October 38 calls for $0.11. Volume was more than 100
times open interest in each strike, so this is clearly a new
bullish call spread
cost $0.45 and will earn a maximum profit of 344 percent if WMB
closes at $38 on expiration. It hasn't traded that high since
September 2000. (See our
The natural-gas stock rallied 2.12 percent yesterday to a
multi-year closing high of $34.69. It had bottomed around $1 in
2002 after the collapse of Enron nearly bankrupted several
energy-trading firms. The shares rallied back to $33 by June 2008
but crashed to $10 after the mortgage bubble imploded.
They've been climbing steadily since then, including a gain of more
than 25 percent so far this year. Energy names have been especially
strong of late as investors have accurately anticipated positive
developments in the European debt crisis and more quantitative
easing by the Federal Reserve.
Overall option volume in the name was triple its daily average in
yesterday's session, according to the Heat Seeker. Calls
outnumbered puts by 125 to 1.
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.
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