Juniper Networks, Inc. (JNPR) calls are trading at 11 times the expected intraday rate
Juniper Networks, Inc. (NYSE:JNPR) jumped to an annual high of $28.26 earlier on unconfirmed buyout buzz involving Ericsson (ADR) (NASDAQ:ERIC). At last check, JNPR remained up 4.2% at $28.10, bringing its year-to-date lead to nearly 26%. As such, calls are flying off the shelves.
By the numbers, 25,000 JNPR calls have been exchanged -- 11 times the normal intraday volume, and more than triple the number of puts on the tape. While the October 30 call is seeing the most action, shorter-term traders are buying to open the July 29 call. In other words, these speculators are banking on JNPR taking out $29 -- representing a nearly four-year high -- by July options expiration.
During the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), JNPR calls have run hot. Nearly 12 calls have been bought to open for every put, per the stock's call/put volume ratio of 11.60 -- higher than 94% of similar readings taken over the last 12 months.
Meanwhile, Juniper Networks, Inc.'s (NYSE:JNPR) Schaeffer's Volatility Index (SVI) of 22% ranks in the 13th annual percentile. In other words, short-term JNPR options are pricing in historically low volatility expectations.