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Steady-money trade in Danaher

David Russell (david.russell@optionmonster.com)

Slowly but surely, one investor is betting that Danaher will continue to muscle its way higher.

optionMONSTER's tracking systems detected the purchase of 5,089 January 67.50 calls for $3.90 and the sale of an equal number of January 2015 72.50 calls for $5.10 yesterday. Volume was below open interest at the lower strike, indicating that an existing short position was closed and rolled forward in time.

The investor apparently owns shares in the industrial conglomerate and is using a covered-call strategy to manage his or her risk. Adjusting the trade raised by $5 the level at which the stock must be sold and lets the investor collect $1.20 of incremental income. It also lets the trader stay in the position for another year. (See our Education section)

DHR rose 0.22 percent to $69.47 yesterday and remains within striking distance of its all-time high from last month. The stock is up 24 percent so far in 2013 and has climbed in a virtually uninterrupted ascent since the mid-1980s.

Total option volume in the name was 12 times greater than average yesterday, with calls outnumbering puts by 39 to 1.

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