PEP's Call-Heavy Options Setup and $155 Bull Call Spread: A Strategic Play on Margin Resilience?

• PEP trades at $147.65, up 1.02% on 670K volume, with Bollinger Bands suggesting a potential breakout above $148.41.
• Options data shows heavy call open interest at $155 and $152.5, while puts cluster at $145–$147. The put/call ratio for open interest is 0.735, favoring bullish positioning.
• A $30M block trade sold PEP20251017P140 puts, signaling bearish bets ahead of October expiration.

Here’s the thing: PEP’s options market is screaming about a tug-of-war between bulls eyeing a $155 breakout and bears hedging below $145. The stock’s 1.02% intraday gain masks a long-term rangebound pattern, but the call-heavy open interest and recent rebranding news could tip the scales. Let’s break it down.

The Call-Put Imbalance and Whale Moves: A Tale of Two Strikles

PEP’s options chain is a chessboard. The top OTM calls for Friday expiration are stacked at $155 (OI: 1,435) and $152.5 (OI: 982), while puts cluster at $145 (OI: 333) and $146 (OI: 288). This isn’t just noise—it’s a signal. Call open interest above $150 suggests institutional players are pricing in a 7.7% upside move, while the put-heavy zone below $147.5 hints at defensive positioning.

But the real drama? That $30M block trade selling PEP20251017P140 puts. Selling puts at $140 implies someone’s confident PEP won’t drop below that level by October. It’s a bearish bet, but not a panic move—more like a hedge against a worst-case scenario. Combine that with the call-heavy $155 strike, and you’ve got a stock that’s being bracketed between $140 and $155.

News Flow: Rebranding, Margin Pressures, and a $585M Bet on Celsius

PepsiCo’s recent headlines are a mixed bag. The rebranding from "Pepsi" to a broader corporate identity is a long-term play, but the $19M insider sell-off and margin pressures from supply chain costs add short-term jitters. Analysts have cut price targets to $158.73–$170, which lines up with the $155 call-heavy zone.

The $585M Celsius investment and $1.2B European expansion show management’s bullish on growth, but the $1.5B cost-cutting goals and 2% margin decline in Q4 2025 highlight near-term risks. This duality—optimism about expansion vs. caution on margins—mirrors the options data. Bulls are betting on the $155 rebranding-driven rally, while bears are hedging against a $140 collapse.

Actionable Trades: Bull Call Spread and Breakout Entries

If you’re bullish but cautious, the PEP20251017C152.5/155 bull call spread is a no-brainer. Buy the $152.5 call (OI: 752) and sell the $155 call (OI: 2,283) for a net debit. The $155 strike has massive open interest, so if PEP breaks above $152.5, the spread could capture 7–9% gains by October 17.

For stock players, consider entry near $146.29 (intraday low) if the 30D support at $151.33 holds. Set a tight stop below $146.29 and target $151.33 first, then $158.68 (Bollinger upper band). The 200D MA at $142.54 is a critical floor—break that, and the $138 put-heavy zone becomes a concern.

Volatility on the Horizon: Balancing Bullish Hopes and Bearish Hedges

The next two weeks will test PEP’s resolve. The $155 call-heavy zone and rebranding-driven rally could push the stock into a new range, but margin pressures and insider selling mean volatility isn’t out of the picture. If PEP closes above $151.33 by next Friday, the bull call spread could lock in gains. If it dips below $145, the block-traded puts might see action.

Bottom line: PEP is a stock caught between a rock (margins) and a hard place (growth bets). The options market is pricing in a $155 ceiling and $140 floor, but the real story is the tension between those levels. For traders, that tension is opportunity—just don’t forget to hedge the downside.