PEP Options Signal Bullish Bias at $150–$155, But $140 Put Block Trade Adds Downside Caution

• PepsiCo (PEP) trades at $142.21, down 0.49% with RSI at 27.5—its lowest level in months.
• Options data shows heavy call open interest at $149–$155 strikes, while a $140 put block trade hints at institutional bearishness.
• Rebranding and climate resilience news could fuel long-term optimism, but near-term margin pressures linger.

Here’s the core insight: PEP’s options market is split between bullish momentum and cautious bearish positioning. The stock sits near its 200-day moving average ($142.52) but faces critical resistance at $149.18 (middle Bollinger Band). While technicals suggest a short-term pullback, the call-heavy options activity and recent news hint at a potential breakout—if volume holds.

Bullish Calls Stack Up, But Puts at $140 Signal a Safety Net

Let’s start with the options chain. This Friday’s top OTM calls are clustered between $149 and $155, with 1,932 open contracts at $149 and 1,862 at $155. That’s not random—it’s a crowd-sourced bet that PEP will break above its 30-day moving average ($146.49) and test the upper Bollinger Band ($157.59). The MACD histogram (-1.18) and RSI (27.5) both scream oversold, so a rebound feels inevitable… unless something derails it.

But here’s the catch: the put open interest isn’t trivial. The $140 strike (OI: 282) and a massive block trade—30,000 puts sold at $140 with $10.2M turnover—suggest big players are hedging against a drop below the lower Bollinger Band ($140.76). Think of it like a safety net: if PEP cracks $140, the put block trade could accelerate selling. That’s a risk to watch.

Rebranding and Climate News: Fuel for Long-Term Optimism

PepsiCo’s recent headlines are a mixed bag. The climate resilience platform expansion and rebranding shift toward snacks/nutrition are solid long-term plays. Investors love stories about sustainability and diversification—both could justify a premium in the stock over time. Shailja Joshi’s promotion also signals internal stability, which is a quiet win for governance.

But here’s the rub: analysts are flagging margin pressures. Rising agricultural costs and supply chain issues aren’t abstract—they’re real, immediate threats to earnings. The rebranding might attract new buyers, but if margins shrink faster than revenue grows, the stock could stall. The options market seems to agree: the put/call ratio (0.64) leans bearish, with more calls betting on a rebound than puts hedging a crash.

Trade Ideas: Calls at $149, Puts at $140, and a Strategic Entry Zone

If you’re bullish, the $149 call (PEP251017C149) expiring Friday is a high-conviction play. With 1,932 open contracts, it’s the most watched strike. A close above $143.28 (today’s high) would validate the short-term bounce. For a longer-term bet, the $150 call (PEP251024C150) next Friday offers more time for the rebranding narrative to gain traction.

Bearish? The $140 put (PEP251017P140) is the block trade’s target. If PEP breaks below $141.58 (today’s low), this strike could see explosive action. But don’t ignore the support at $140.76 (lower Bollinger Band)—a bounce here might negate the put’s value.

For stock traders: Consider entry near $140.76 if the lower Bollinger Band holds. A successful rebound could push PEP toward $149.18 (middle band) or even $157.59 (upper band). A breakdown below $140.76, however, could force a retest of the 200-day MA at $142.52—use that as a stop-loss reference.

Volatility on the Horizon: Balancing Bullish Momentum with Strategic Caution

The next few weeks will test PEP’s resolve. The options market is pricing in a 64% call bias, but the block trade at $140 reminds us that bears aren’t asleep. The rebranding and climate news are positive, but they’re long-term stories. In the short term, watch for a breakout above $143.28 or a breakdown below $140.76—either move will define the next chapter.

Here’s the play-by-play:

• Bull case: Buy the $149 call if PEP closes above $143.28. Target $155.
• Bear case: Buy the $140 put if PEP dips below $141.58. Target $135.
• Stock entry: Buy near $140.76 with a stop at $139.50.

The key takeaway? PEP isn’t a one-way bet. It’s a tug-of-war between bullish technicals and cautious options positioning. Your job is to pick your side—and stick to it.