Despite strong earnings results from
Cisco Systems (NASDAQ: CSCO ),
shares of competitor
Juniper Networks Inc. (NYSE: JNPR )
are currently down 1.5% on the day. At least one investor is
calling for a floor in the stock in the near-term and expressing
that bet by selling puts.
The near-the-money March 24 puts have crossed the tape more than
10,200 times versus current open interest of 670 contracts,
suggesting investors traded these options to open. We saw several
blocks go off close to the bid price of 83 cents per contract
around 11:20 a.m. EST today, indicating investors sold these
options betting on limited downside in the stock.
By opening a free virtual trading account with OptionsHouse, you
can build a profit/loss diagram to help visualize this trade.
The March 24 puts are currently trading up 11 cents on the day,
which is lower than a delta of 35 would suggest.
Investors who sold these puts are capping their gain on this
trade at 83 cents per contract, and will make money if JNPR shares
close higher than $23.17 at March options expiration in 43 days.
Additionally, the investor is factoring in a potential 7% drop in
the stock. For this reason, this trade is more neutral than