Huge leveraged trade in Danaher

By
A A A

Danaher has been consolidating for months, and now the bulls are back.

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 of the short puts . He or she may be comfortable doing that because it peaked around that level in July and then bounced at it in October.
(See our Education section)

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.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.


This article appears in: Investing , Options

Referenced Stocks: DHR

optionMONSTER

optionMONSTER

More from optionMONSTER:

Related Videos

Stocks

Referenced

80%

Most Active by Volume

44,823,339
  • $75.19 ▲ 0.28%
43,744,171
  • $3.44 ▼ 0.29%
42,340,022
  • $97.671 ▲ 0.66%
34,178,145
  • $17.62 ▼ 1.23%
34,028,998
  • $15.59 ▼ 0.19%
32,055,708
  • $21.23 ▼ 2.41%
31,539,235
  • $3.76 ▲ 0.80%
30,434,619
    $34.25 unch
As of 7/25/2014, 04:03 PM