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Call volume accelerated on Juniper Networks, Inc. (NYSE:JNPR - 21.40) on Wednesday, as traders placed last-minute bullish bets in the February-dated series of options. Nearly 6,800 contracts crossed the tape, representing a 76% mark-up to the average daily volume for call options. Two of the day's more popular strikes were JNPR's February 21 and 22 calls, which saw a collective 3,308 contracts change hands. The majority at each strike went off at the ask price, and implied volatility ticked higher, suggesting a portion of yesterday's activity was of the buy-to-open variety.
By buying the in-the-money February 21 calls for a volume-weighted average price (VWAP) of $0.54, traders expect JNPR to finish above $21.54 (strike plus VWAP) by tomorrow's close -- when front-month options expire. Meanwhile, the February 22 calls were purchased for a VWAP of $0.10, making breakeven $22.10 for the buyers. Moves of this magnitude require respective upticks of 0.7% and 3.3% throughout the next two sessions in order for these options to become profitable.
Technically, JNPR has been in a solid uptrend in recent months, with the shares up roughly 34% from their mid-November low of $16.02. Additionally, the equity has outperformed the broader S&P 500 Index (SPX) by nearly 19 percentage points throughout the past 60 sessions. This positive price action has been highlighted by the stock's 32-day moving average, which helped usher JNPR to an 11-month high of $22.98 on Monday, Feb. 4.
This trendline -- currently located at $21.31 -- is being tested in today's session, though, as JNPR follows the broad market into the red. At last check, the stock was down 1.2% to hover near $21.40. Should the equity fail to muscle above the aforementioned breakeven levels by the sound of tomorrow's closing bell, the most Wednesday's call buyers have risked is the initial premium paid.