PEP Options Signal Bullish Setup: Target $155 Breakout Amid Legal Risks and Leadership Shifts

• PEP trades at $150.74, down 0.32% with volume surging to 2.28M shares.
• Call open interest spikes at $155 and $160 strikes for Friday expiration, while puts cluster at $140 and $135.
• Block trade of 30,000 puts at $140 (exp 10/17) hints at institutional hedging or support testing.

Here’s the takeaway: PEP’s options market is betting on a bullish breakout above $155, but legal risks and cost-cutting headlines could create volatility. The stock shows upside potential if it clears key resistance, but downside risks linger near $140.

Bullish Pressure at $155 and Bearish Anchors at $140

The options data tells a clear story. For Friday expiration (12/19), call open interest is concentrated at $155 (OI: 5,367) and $160 (OI: 3,133), suggesting institutional players are positioning for a price surge. These strikes align with PEP’s 30-day moving average ($146.34) and Bollinger Upper Band ($151.43), creating a tight corridor of interest.

But don’t ignore the puts. The $140 strike (OI: 3,390) and $135 (OI: 2,892) are heavily shorted, indicating a bearish floor. The block trade of 30,000 puts at $140 (PEP20251017P140) is particularly telling—it could signal a hedge against the lawsuit risk or a whale testing support. If PEP breaks below $147.67 (Bollinger Middle Band), these puts could trigger a cascade of selling.

Legal Headlines vs. Restructuring Optimism

The class-action lawsuit against PEP and Walmart is a wildcard. While it could pressure the stock short-term, the leadership reshuffle and innovation pipeline might offset some of that. Steven Williams’ promotion to Global Chief Commercial Officer signals a focus on growth, and the SKU reductions/operational streamlining could boost margins.

But here’s the catch: The layoffs and cost-cutting narrative is a double-edged sword. Investors love efficiency, but job cuts often raise red flags about long-term innovation. The lawsuit, meanwhile, could drag on for months—enough time to test PEP’s $140 support level.

Actionable Trades: Calls at $155, Puts at $145

For options traders, the most compelling setup is buying calls at the PEP20251219C155 strike. If PEP breaks above $152.5 (current OI: 993), this strike could see explosive gains. For a longer-term play, the PEP20251226C157.5 (OI: 392) offers leverage if the stock holds above $150.42 (intraday low).

On the downside, the PEP20251219P145 (OI: 2,032) is a safer bet than the $140 puts. If PEP gaps down on lawsuit news, this strike could cap losses while avoiding the extreme bearishness of the $135 puts.

Stock traders should consider entry near $150.42 if support holds, with a target at $155. A stop-loss below $147.67 (Bollinger Middle) is critical. Alternatively, short-term traders could scalp the $152.35 intraday high if the stock retests it before Friday expiration.

Volatility on the Horizon

The next 72 hours will test PEP’s resolve. A breakout above $155 could validate the bullish options bets and leadership optimism. A breakdown below $145, however, would force a reevaluation of the lawsuit’s impact. Either way, the $140–$160 corridor is where the action lives. Stay nimble—this stock isn’t done surprising us yet.