PEP's Call-Heavy Options Setup and $170 Bull Call Strategy: A 7.5% Upside Play Amid Strategic Shifts

• PEP trades at $168.71, up 0.7% with volume surging to 4.5M shares
• Options data shows 0.66 put/call OI ratio, with 1,770 contracts at $170 call (this Friday's top OTM)
• Analysts raised price targets to $175–$190 after $10B buyback and snack price cuts

The market is betting big on PEP’s upside, but a $165 support level could test that optimism.Bullish OI Clusters and Whale Moves: What’s Cooking at $170?

Options traders are piling into PEP calls like it’s 2021 all over again. The $170 strike (PEP20260213C170) dominates this Friday’s open interest with 1,770 contracts—nearly triple the next strike. That’s not just noise; it’s a vote of confidence in a $168.71 stock that’s already flirting with its 30-day high of $170.17.

But here’s the twist: the $150 put (PEP20260213P150) has 4,738 contracts of OI, a bearish counterweight. It’s like a tug-of-war between bulls eyeing $175+ and bears bracing for a drop to $150. The block trade of 3,000 puts at $167.50 (PEP20260220P1675) adds intrigue—someone’s hedging a short-term rally, but not all the way to $170.

News Flow: Buybacks, Price Cuts, and Analyst Love

PepsiCo’s recent moves are textbook value plays. The $10B buyback and 15% snack price cuts have Wall Street buzzing. Morgan Stanley just upped its target to $180, and for good reason: PEP’s Q4 beat by $0.02 and revenue topped forecasts. But don’t ignore the debt debate—94.83% payout ratio and $675K block trade on puts hint at risks if margins falter.

Actionable Plays: Calls for the Bold, Puts for the PrudentFor Options Traders:

• Aggressive Play: Buy PEP20260213C170 at $2.46 (implied $172.46 breakeven). If PEP holds above $165.29 (Bollinger Middle Band), this call could hit 15–20% gains by Friday.
• Balanced Spread: Sell PEP20260213C175 against a long PEP20260213C170. Max profit at $175, capping risk while riding the $170 OI wave.

For Stock Investors:

• Entry: Consider buying PEP near $168.71 if it holds above $167.26 (intraday low). Target $172.50 (Bollinger Upper Band) with a stop at $165.29.
• Hedge: Buy PEP20260213P160 for next Friday to protect against a pullback. It’s cheaper than the $150 puts and gives 7 days to react.

Volatility on the Horizon: Bulls Have the Edge, But Stay Nimble

PEP’s 86.7 RSI screams overbought, but the 12.67% two-week rally has a tailwind: a $10B buyback program and a 3.4% yield. The real test comes in the next 72 hours—will PEP break $170.17 and hold it? If so, the $175 OI wall could turn into a rocket. But if it dips below $165.29, those puts at $150 might get a workout. Either way, this stock isn’t going to sleepwalk into 2026.