Williams Company saw two complex option spreads as its shares fell sharply yesterday.
WMB lost 2.3 percent to finish the day at $30.52, its lowest close since late March. Shares of the natural-gas pipeline company have been in a steep decline since hitting a three-year high of $34.63 on the first day of May.
Just shy of 50,000 WMB options changed hands, compared to a daily average of 10,000. The activity was dominated by two three-way trades, according to optionMONSTER's tracking systems.
The first involved 7,166 each of the August 29 puts, 24 puts, and 34 calls. The calls were sold for $0.61, the 29 puts bought for $1.15, and the 24 puts sold for $0.24. The call volume was less than open interest.
Then, late in the afternoon, 5,957 each of the May 26 calls, August 29 calls, and August 25 puts traded. The May 26 calls were bought for $4.58 against open interest of 18,134. At the same time, the August 29 calls were sold for $2.6 and the August 25 puts bought for $0.44.
Both of these trades appear to be bearish positioning, possibly collars protecting long shares. (See our Education section)
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