Danaher has been consolidating for months, and now the bulls are
optionMONSTER's Heat Seeker monitoring program detected the
purchase of 20,000 January 75 calls for $4.09. Equal-sized blocks
were sold at the same time in the January 67.50 puts for $2.51 and
the January 82.50 calls for $1.45. Volume was more than 8 times
open interest at all three strikes, which indicates that new
positions were initiated.
The three-way trade, which cost just $0.13 to open, will inflate to
$7.50 if the diversified industrial stock closes at $82.50 or
higher on expiration early next year. The investor is also on the
hook to buy shares for $67.50 if it goes below that price because
. He or she may be comfortable doing that because it peaked around
that level in July and then bounced at it in October.
DHR rose 1.04 percent on Friday. It almost doubled in value between
late 2011 and early 2014 but has been pulling back since. The
shares have been bouncing at their 200-day moving average in the
last month, which could make some chart watchers think that the
longer-term uptrend remains intact.
Overall option volume was 43 times greater than average in the
session, with that bullish combination trade accounting for 91
percent of the total.
Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.