Market Overview

Unusual Option Opportunity In Williams Companies

Share:
Related WMB
A New ETF Off To A Blistering Start
Some Of The Most Notable Changes This 13F Season
Williams resumed at Overweight by Barclays ahead of potential catalysts (Seeking Alpha)

According to Options and Volatility, shares of Williams Companies Inc (NYSE: WMB) saw unusually high options activity on Monday. Notably, the October 57.50 calls traded 50,803 contracts versus only 179 open interest. The November 49 calls traded 23,748 contracts as well.

In addition to the increased volume, the implied volatility on the October 57.50 calls rose dramatically, moving from 40.73 on Friday's close to 44.83 on the close Monday, an increase of nearly 11 percent. With the stock down $0.83 on the day, the October 57.50 calls actually rose in price by $0.08, due to the heavy buying pressure. This set up a covered call opportunity, buying shares of Williams Companies and selling a October 57.50 call for each 100 shares purchased.

Options and Volatility noted this captures a 2.37 percent edge and positions bullishly along with the large call buyer. The October 57.50 calls have a delta of 32, while the covered call position has a somewhat more bullish delta of 68.

Shares closed at $51.65, down $0.83 on Monday.

Disclosure: The author has no position in WMB the time of publishing.

Posted-In: Long Ideas Options Markets Trading Ideas

 

Related Articles (WMB)

View Comments and Join the Discussion!