Juniper Networks, Inc. (NASDAQ: JNPR) shares are trading higher nowadays after RBC Capital Markets upgraded the stock to Sector Perform from Outperform as famous by our own Eric Buscemi. We always think what kind of trade might prepare sense in light of the news. whether you think that the company’s stock won’t fall by too much in the coming months, soon after now could be a good instance to look at a bullish hedged trade on JNPR.

After hitting a one-year low of $17.21 in March, the stock hit a one-year high of $37.95 in October. JNPR opened that at $26.91. So far nowadays the stock has hit a low of $26.54 and a high of $27.36. As of 11:20, JNPR is trading at $27.16, up 97 cents (3.7%). The chart for JNPR looks bearish but improving slightly, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on that stock, I would consider an April bull-put credit spread below

the $22.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For that specific trade will build an 8.7% return in just two months as enlarged as JNPR is above $22.50 at April expiration. Juniper would have to fall by more than 17% before we would start to lose money.

JNPR hasn’t been below $22.50 since final May and has shown support around $25 recently. that trade could be risky whether JNPR continues its recent downward slide, but even whether that happens, that position could be protected by the support the stock has found just below $25 by the past month.

Brent Archer is an options analyst and writer at Investors Observer. At publication moment, Brent neither owns nor controls positions in JNPR.

Original post by Brent Archer

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