$JNPR bears turn quick gains

Option traders doubled their money today on downside positions opened in Juniper Networks (JNPR) only one session earlier.

Just yesterday, Market Rebellion’s Unusual Activity Service found that 6,100 Weekly $23.50 puts expiring this Friday were bought for $0.40 to $0.48 with shares at $24.12. This was clearly fresh buying, as open interest in the strike was a mere 61 contracts before the activity appeared.

Those puts traded for as much as $0.80 today, twice their initial purchase price. The stock fell 5.47% in the same time frame, illustrating the kind of leverage that can be achieved quickly with options.

Long puts lock in the price where a stock can be sold no matter how far it might drop, gaining value in a selloff with the potential for significant leverage. The contracts can be purchased either as an outright bearish bet or a hedge on a long-stock position.

JNPR is down 4.86% to $23.28 this morning. Shares dropped after the networking-equipment maker issued a disappointing outlook before the market opened today.