Options Bulls Jump On Juniper Networks, Inc. (JNPR)

Speculators expect Juniper Networks, Inc. (JNPR) to end the week strong

Digital Content Group
Jan 7, 2015 at 2:22 PM
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Amid unsubstantiated takeover chatter, Juniper Networks, Inc. (NYSE:JNPR) is 2.7% higher today, after once again bouncing from its 40-day moving -- a level that contained the stock's dip in mid-December. At $22.64, the equity is working back to its year-over-year breakeven mark. Meanwhile, options volume has skyrocketed to over nine times what usually seen at this point in the session.

Speculators have focused their attention on calls, which make up all 10 of today's most active strikes, with the weekly 1/9 22.50 strike leading the way. The 6,043 contracts that have crossed at this strike give the impression of buy-to-open activity, meaning these traders expect the security to extend today's push above the $22.50 mark before Friday's close, when the weekly series expires.

Today marks a change of pace in the options pits, as JNPR puts have been bought to open at a faster-than-usual pace during the past two weeks, according to its 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.06, which ranks in the 74th percentile of its annual range. The stock's move higher could persist if some of these put-focused speculators hit the exits.

Also, despite outperforming the broader S&P 500 Index (SPX) by 9.5 percentage points in the last three months, Juniper Networks, Inc. (NYSE:JNPR) has been the target of short sellers, with short interest jumping 38% in the last two reporting periods. The stock could be in line for a short-squeeze situation should its rally continue, or should the aforementioned buyout buzz prove true.

Daily Chart of JNPR since October
 

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