【for my derelict favorite read】Why trader is selling calls in Danaher

Danaher climbed to new highs yesterday,for my derelict favorite read but one trader apparently believes that further gains will be limited in coming months.

A trader bought 3,128 January 57.50 calls for $1.08 against previous open interest of 5,689, according to optionMONSTER systems. At the same time, he or she sold 3,819 June 62.50 calls for 1.23 and $1.22 in volume far above the open interest of 348 at that strike.

This appears to be a trader buying back the January short calls, which are now in the money and expire in two weeks, and rolling the position to the higher strike in later-dated contracts. The options were very likely sold against long shares in a covered call strategy, which allows the investor to generate income by selling calls while holding a long stock position. The new short calls will allow the trader to profit up to the $62.50 strike price but not beyond. (See our Education section)

DHR is in business of professional, medical, industrial, and commercial products and services. The stock rose 0.96 percent to $58.03 yesterday after hitting a new all-time high of $58.34 earlier in the session. It has been running higher for the last six weeks from support around $52.

Total option volume in the name was 11,456 contracts, compared to a daily average of just 580. More than 5,400 of the January 57.50 calls and 4,400 of the June 62.50 calls traded overall.

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