Why trader is selling calls in Danaher
Chris McKhann | email@example.com
DHR is up fractionally on the day, trading at $52.43. The medical and industrial product maker rebounded off support at $50 last week after hitting a 2012 low of $49.18. However, the stock has been trending lower from its 52-week high of $56.45 set at the start of April.
More than 5,300 DHR options have changed hands so far, about 4 times its daily average, according to optionMONSTER's systems. A trader sold 4,400 January 57.50 calls for the bid price of $1.45 against previous open interest of just 683, so this was a new opening position.
The calls may have been sold naked with an initial bearish bias, or they could have been traded against long shares in a covered call position. The latter would be bullish up to the strike price but would not partake in any upside above that level. (See our Education section)