PEP Options Signal Bullish Momentum: Calls at $155 Dominate as Puts at $140 Hint at Risk Management Plays

• PEP trades at $149.44, up 0.27% with volume at 2.85M shares.
• Call open interest (OI) outpaces puts 2.86M to 1.93M, with heavy call OI at $155 and $150.
• Block trade of 30K puts at $140 (expiring Oct 17) hints at institutional downside hedging.
• Technicals show bullish momentum: RSI at 58.7, MACD above signal line, and price above all major moving averages.

The options market is whispering a story of cautious optimism. With calls dominating OI and price action perched above key support, PEP shows upside potential—but puts at $140 and $142 act as a subtle warning sign. Let’s break it down.Bullish Calls at $155, Puts at $140: A Tale of Two Strategies

This Friday’s options chain reveals a clear divide. Calls at $155 ($1,215 OI) and $150 ($1,060 OI) dominate, suggesting traders are pricing in a potential push toward $155+ by expiration. Meanwhile, puts at $140 ($703 OI) and $142 ($703 OI) indicate a psychological floor many are eyeing.

The block trade of 30K puts at $140 (PEP20251017P140) is telling. It’s not just retail noise—this is institutional capital hedging against a sharp drop. Think of it like a captain securing the hull before a storm. But here’s the twist: the same trade could signal confidence that $140 will hold, given the recent supply chain cost cuts and dividend boost.

News Flow: Product Cuts and Puts in Motion

PepsiCo’s recent headlines—product line reductions, supply chain reviews, and a 3.8% dividend—paint a picture of a company tightening its belt while rewarding shareholders. These moves align with the bullish options activity. Lower prices and cost cuts could juice margins, fueling a rebound in consumer demand.

But here’s the catch: the put-heavy OI at $140 and $142 suggests some investors still fear a relapse into the 200D support zone ($131–$132). The recent Elliott Investment talks add a wildcard—structural changes like refranchising bottlers could either unlock value or create short-term volatility.

Actionable Trades: Calls for the Bold, Puts for the Prudent

For options traders:

• Bullish Play: Buy PEP20251219C150 (next Friday’s $150 call) if price breaks above today’s high of $150.31. Target $155+ for 33%+ gains.
• Bearish Hedge: Buy PEP20251219P140 (next Friday’s $140 put) if price dips to $148.74 (intraday low). Protect against a drop to $143.88 (lower Bollinger Band).

For stock traders:

• Entry Near $146: If PEP holds above 30D support ($145.96–$146.13), consider buying dips. Target $155 (upper Bollinger Band) with a stop below $143.88.

Volatility on the Horizon: Balancing Bullish Momentum with Prudent Risk Management

PEP’s setup is a classic tug-of-war between optimism and caution. The options data leans bullish, but the put-heavy OI and block trades remind us to keep a safety net. If the stock clears $150.31, the path to $155 is open—but a breakdown below $146 could reignite bearish bets.

Final Take: This is a stock with momentum, but not without risks. The key is to ride the bullish wave while keeping a tight grip on stops. For those who’ve been sidelined, PEP offers a chance to re-enter a story of cost-cutting and shareholder returns. Just don’t ignore the puts—they’re there for a reason.