Keurig Dr Pepper Plunges 9.4%: What’s Fueling the Selloff?

Summary
• KDP’s intraday price drops to $31.83, a 9.4% collapse from its $35.14 open
• RSI hits 85.33, signaling overbought conditions amid a sharp bearish reversal
• Options chain surges: 21.13M shares traded in 32-strike puts, 8.5M in 31-strike puts
• Bollinger Bands show price near lower band ($32.56), below 30D ($33.93) and 200D ($33.21) averages
Today’s selloff in Keurig Dr Pepper has sent shockwaves through the beverage sector. With the stock trading near its intraday low and technical indicators flashing red, traders are scrambling to decode the catalyst. The options market is already pricing in extreme volatility, with heavy put buying at key strike levels. This article unpacks the technical and options-driven forces behind the move—and what’s next.

Technical Overbought Divergence Sparks Profit-Taking
The 9.4% intraday drop in KDP is driven by a classic technical breakdown. The RSI (85.33) and MACD (0.45) suggest the stock was overbought after a short-term bullish trend, triggering algorithmic and discretionary selling. Price has fallen below all major moving averages (30D: $33.93, 200D: $33.21), with Bollinger Bands confirming oversold conditions. The absence of company news points to technical exhaustion and profit-taking after a failed rebound from the 52W low ($30.12).

Beverage Sector Mixed as Coca-Cola Holds Steady
While KDP’s selloff is extreme, the broader Beverages - Non-Alcoholic sector remains stable. Coca-Cola (KO), the sector leader, is down only 1.46% intraday, suggesting the move is stock-specific rather than sector-driven. KDP’s volatility appears isolated to its own technical profile, with no spillover into peers.

Bearish Options Playbook: Capitalizing on KDP’s Volatility Surge
• 200-day average: $33.21 (below current price)
• RSI: 85.33 (overbought divergence)
• Bollinger Bands: Lower band at $32.56 (price near support)
• MACD: 0.45 (bullish signal fading)

Key levels to watch: 33.31–33.36 (30D support), 33.47–33.58 (200D resistance). The RSI overbought reading and price below all moving averages suggest a short-term bearish bias. While no leveraged ETF data is available, the options market is pricing in aggressive downside risk.

Top Options Picks:
• KDP20250919P32
- Put option, strike $32, expires 2025-09-19
- IV: 23.10% (moderate), Leverage: 35.26%, Delta: -0.5328 (high sensitivity), Theta: -0.0025 (low decay), Gamma: 0.2028 (high sensitivity to price moves), Turnover: 197,716
- IV (Implied Volatility): Reflects market’s expectation of price swings
- Leverage (Leverage Ratio): Amplifies returns relative to underlying price moves
- Delta (Delta): Measures price sensitivity; -0.53 means $0.53 loss per $1 stock drop
- Gamma (Gamma): High gamma means delta becomes more negative as price falls
- This put stands out for its high gamma and moderate IV, offering amplified returns if KDP continues below $32. A 5% downside to $30.24 would yield a payoff of $1.76 per contract.

• KDP20250919P31
- Put option, strike $31, expires 2025-09-19
- IV: 20.31% (low), Leverage: 88.15%, Delta: -0.3145 (moderate sensitivity), Theta: -0.0047 (low decay), Gamma: 0.2061 (high sensitivity), Turnover: 17,772
- IV (Implied Volatility): Lower IV suggests cheaper premium but less volatility priced in
- Leverage (Leverage Ratio): High amplification potential for aggressive downside
- Delta (Delta): -0.31 means $0.31 loss per $1 stock drop
- Gamma (Gamma): High gamma increases delta’s responsiveness to price moves
- This put offers high leverage and gamma, ideal for a sharp breakdown. A 5% move to $30.24 would generate a $2.76 payoff.

Trading Hook: If KDP breaks below $32.56 (lower Bollinger Band), KDP20250919P32 offers a high-gamma bearish play. Aggressive traders may consider KDP20250919P31 for amplified downside exposure.

Backtest Keurig Dr Pepper Stock Performance
The backtest of KDP's performance after a -9% intraday plunge shows favorable short-to-medium-term gains. The 3-Day win rate is 56.29%, the 10-Day win rate is 54.60%, and the 30-Day win rate is 53.85%. Although the maximum return during the backtest period is only 2.00%, the overall trend suggests that KDP tends to recover modestly following a significant intraday decline.

Act Now: KDP’s Technical Weakness Demands Immediate Positioning
The technical collapse in KDP suggests a high-probability continuation of the downtrend, with key support levels at $32.56 and $31.82. Traders should prioritize short-term bearish options with high gamma and moderate IV, as outlined. Coca-Cola’s resilience (-1.46%) indicates the selloff is stock-specific, reducing sector-wide risk. Action Step: Monitor the $32.56 level—break below it to trigger the put options strategy. Watch for a potential rebound test of the 30D support ($33.31) as a possible entry point for contrarian longs.