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Juniper Networks, Inc.'s (NYSE:JNPR - 21.67) dreary price action in today's session has option players scrambling to place bearish bets. Around 17,000 puts have crossed the tape so far, more than seven times their average intraday volume, and roughly 79% of these have traded at JNPR's February 21 strike. The majority of these puts have gone off at the ask price, and volume is easily outstripping open interest, indicating the initiation of new positions.
By buying these puts to open for a volume-weighted average price (VWAP) of $0.31, traders will begin to profit with each step south of $20.69 (strike price minus VWAP) JNPR takes through the close on Friday, Feb. 15, at which point the options will expire. This breakeven mark represents a 4.5% slide from current levels.
Today's bearishly skewed bias is just more of the same for option players, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The stock's 10-day put/call volume ratio of 1.09 ranks higher than 78% of similar readings taken in the past year, indicating puts have been bought to open over calls at an accelerated pace in recent weeks.
Even more telling is the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.22. Not only does this show that put open interest outweighs call open interest among options expiring in three months or less, but it ranks in the 99th percentile of its annual range. In other words, short-term speculators have been more put-heavy just 1% of the time within the past year.
This negative outlook is surprising, given the stock's 35% bounce from its mid-November low of $16.02. Additionally, JNPR has outperformed the broader S&P 500 Index (SPX) by more than 26 percentage points during the last 60 sessions. In light of the security's recent display of positive price action, this penchant for puts could simply be shareholders picking up protection against a potential pullback.
The equity is trading around 2.5% lower in today's session on no apparent news. However, with JNPR's Relative Strength Index (RSI) of 70 sitting in overbought territory, a near-term consolidation may have been in the cards.