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By Chris McKhann

The biggest options action of the morning comes from the Williams Company (NYSE:WMB), with more than 100,000 contracts going off in one trade.

WMB Chart

The average daily options volume in WMB is 7,000 contracts over the last month, so the volume definitely is eye-catching. We saw unusual action in the natural gas name just the other day, but today the volume is even greater.

optionMONSTER's systems show the sale of 52,800 February 10 calls for $11 against open interest of 60,808 contracts. A minute later a block of 41,160 May 16 calls were bought for $5.30, and a few seconds later another block of 17,640 traded for $5.20. This strike had no open interest, so these were new opening positions.

WMB trades at $20.84, down 0.22 percent so far this morning. Shares hit a 52-week high of $23.76 three weeks ago and then fell to $19.50 by the end of last week.

It looks as if this large transaction involves a trader selling a long deep-in-the-money call to take profits and rolling the position up and out (to a higher strike at later-dated contracts). The strategy is still using in-the-money calls, which increase cost but reduce the time premium.

(Chart courtesy of tradeMONSTER)