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Call volume has ballooned on Juniper Networks (JNPR - 22.82) today, as roughly 31,000 of these options have been traded so far, which is almost triple the norm. The bulk of the action has centered around the April 22 and 25 strikes, where a total of 20,730 calls have changed hands.
Taking a closer look at the data, it appears that a block of 9,980 calls was sold at the 22 strike, while an equal number of calls were simultaneously purchased at the 25 strike. This activity is indicative of a bear call spread. By employing this strategy, the trader is expecting the stock to close at or below $22 by April expiration. In this scenario, both options would expire worthless, which would enable him to collect the maximum profit of $1.16 (net credit received). On the other hand, his potential risk is limited to $1.84 -- or, the difference between the strike prices, minus the net credit.
JNPR has been on call players' radar prior to today, though, as the equity sports a Schaeffer's put/call open interest ratio (SOIR) of 0.69 -- confirming that calls comfortably outnumber puts among options set to expire within three months. This ratio ranks in only the 37th percentile of its annual range, signaling that speculators have been more bullishly aligned toward the stock just 37% of the time over the past 12 months.
Elsewhere, short interest on the tech concern shot up by 24.19% during the last two reporting periods, suggesting that short sellers looking to hedge their bets could be contributing to some of the recent call volume. However, there is still plenty of room aboard JNPR's bearish ship, considering these shorted shares make up a modest 1.7% of the equity's available float.
From a technical perspective, JNPR has added around 11.5% so far this year, but has underperformed the broader S&P 500 Index (SPX) by over 13% during the past 60 sessions. On the charts, the stock is hovering just above its 32-week moving average, which has not been surpassed since mid-May.
In the afternoon hours of the session, JNPR is up 5.6% to wink at the $22.82 mark.
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