Danaher continues to bounce, but one call seller is betting that it will be limited.
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)
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People get into option trading for a number of reasons, but there are three primary motivations: to increase income, to...
