12500 WMB Nov 52.5 calls trade at 1.27 to open. ?On the day 13975 have traded so far.
Call Over Writer in WMB
Williams Companies was trading 48.93 up .41 with an IV of 21.73, down 2%, when a call seller in November traded 12500 of the Nov 52.5 calls at 1.27 to open.? On the day 13975 have traded so far.
This is likely a call over writer that is selling calls against a long underlying position.? The trader is hoping WMB has a slow rally toward 52.5 through November, and would be topped out above 53.77.? This would be a 10% return over the next few months.? Annualized it would be well over 20%.
This should be considered mildly bullish the underlying and bearish volatility.
Bearish Put Spreads in VALE
Vale SA was trading 6.52 up .04 with an IV of 53.15 when some serious put spread buying took place in June.? So far traders have bought just over 17,000 of the June 6.5-6 put spread paying .18 and .19 respectively.?
This appears to be a play on a somewhat immediate drop in the underlying in VALE down toward the 6.00 dollar level.? The trader would make about 150% on his or her money if the underlying drops to 6
This trade should be considered bearish the underlying and bullish implied volatility.? Traders looking to piggy back might buy the July 6/5 put spread for .18 or the 6 puts outright for .25
Put Stupid Trades in RSX
Market Vectors Russia ETF currently trading 17.89 with an IV of 35% down .30 is saw a large put stupid trade.? A customer bought 14700 of the Aug 17 puts for .825 and bought 14700 of the Nov 17 puts for about 1.33 both on splits
This might be a play on Russian action in Ukraine as the weather turns and a potential increase in sanctions.? The trader seems to think that RSX is going to drop over the next few months back toward the lows we saw at the height of the Ukrainian battle
Trade should be considered bearish RSX and bullish volatility in the underlying. Traders looking to piggy back might simply jump on these puts.? Although, due to duration these COULD be a hedge, tread carefully.