PEP Options Signal $140–$155 Battle: How to Play the Post-Layoff Volatility Playbook

• PEP trades at $144.18, down 1% from $145.63 after a volatile session with a bearish Kline pattern and bullish engulfing candle.
• Options market shows heavy call open interest at $150–$155 (next Friday) and put OI at $140–$142, with a put/call ratio of 0.65 (bullish bias).
• Block trade of 30,000 puts at $140 (expiring Oct 17) hints at institutional confidence in near-term support.

The stock is caught in a tug-of-war: technicals point to a short-term bearish setup, but long-term bullish trends and options positioning suggest a $140–$155 range battle. Here’s how to navigate it.The Options Imbalance: A Bullish Floor or Bearish Ceiling?

Let’s start with the numbers. Call open interest spikes at $150 (3,421 contracts) and $155 (5,267) for next Friday, while puts dominate at $140 (3,517) and $135 (3,300). This isn’t just noise—it’s a signal. The put/call ratio of 0.65 (favoring calls) suggests traders are pricing in a higher probability of a rebound. But don’t ignore the puts: heavy OI at $140 acts like a floor. If PEP breaks below $143.04 (lower Bollinger Band), those puts could trigger a short-covering rally.

The block trade of 30,000 puts at $140 (PEP20251017P140) is telling. It’s not just a hedge—it’s a bet that PEP won’t crater. Think of it as a big player saying, “I’ll take the risk if the stock dips here.” That could create a self-fulfilling support level. But if the stock holds above $146.56 (middle Bollinger Band), the call-heavy positioning might push it toward $150.

News-Driven Narrative: Restructuring as a Double-Edged Sword

PepsiCo’s layoffs, product cuts, and collaboration with Elliott are creating a mixed bag. On one hand, cost savings and portfolio streamlining could boost margins by 2026. On the other, short-term uncertainty around job cuts and SKU reductions risks earnings volatility. The market’s reaction? A stock down 4.5% year-to-date but with a 52-week high of $150.

Here’s the twist: the options data aligns with the news. Heavy call OI at $150 mirrors the company’s 2026 revenue growth targets. Meanwhile, the puts at $140 reflect fears of a near-term selloff if restructuring costs outweigh savings. The key is timing—will the pain of today’s cuts be priced in by next Friday, or will the long-term optimism take over?

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

For options traders, the most compelling setups are:

• Bullish Play: Buy PEP20251219C150 (next Friday’s $150 call) if PEP breaks above $146.55 (middle Bollinger Band). The RSI at 42 suggests oversold territory, and a close above $147.56 (intraday high) could trigger a rebound. Target: $150 (30D resistance).
• Bearish Play: Buy PEP20251212P142 (this Friday’s $142 put) if PEP dips below $143.04 (lower Bollinger Band). The block trade at $140 adds a safety net, but a break below $142 could accelerate the move. Target: $135 (next major support).

For stock traders:

• Entry near $144.50 if PEP holds above $143.04. Target $146.25 (30D MA) as a first stop, then $147.56 (intraday high).
• Entry near $142 if it breaks below $143.04. Target $135–$131.43 (200D support).

Volatility on the Horizon: A Balancing Act

This is a stock at a crossroads. The short-term technicals and options positioning suggest a $140–$155 range battle, with the 200D MA ($142.33) as a critical level. If PepsiCo executes its restructuring without major hiccups, the long-term bullish trend could reignite. But if the near-term pain outpaces the long-term gains, the puts at $140 might become a lifeline. Either way, the next two weeks—especially with options expiring Dec 12 and 19—will be pivotal.

The message is clear: position for a rebound but hedge against the downside. The market isn’t all-in on PEP’s revival, but it’s not betting against it either. That’s the sweet spot for traders who can stomach the noise and play the range.