PEP Options Signal Bullish Bet: $160 Call OI Surpasses Puts, Suggesting Upside Breakout Potential

• PEP trades at $147.45, up 1.1% on 2.27M volume, with Bollinger Bands hinting at a $138.79–$155.44 range.
• Call open interest dominates at $160 (13,925 contracts), while puts peak at $145 (3,905), signaling a 0.63 put/call imbalance.
• Elliott Management’s $4B stake and $8.6B shareholder return plan clash with factory closures and reformulation costs.
• RSI at 33 suggests oversold rebound potential, but MACD (-0.7) warns of near-term momentum risks.

The stock is primed for a breakout—or a sharp correction. Here’s how to position for either.Bullish OI Clusters and Whale Moves: A Tale of Two Strikes

Let’s start with the options data. The call open interest at $160 is nearly 3.5x higher than the nearest put strike ($145). That’s not just noise—it’s a vote of confidence from institutional players. When you see such a lopsided OI profile, it usually means two things: either big money is hedging a bullish bet, or they’re setting up a short-term volatility play. Given the 1.1% intraday pop and the RSI hovering near oversold territory, I lean toward the former.

But don’t ignore the puts. The $145 strike has 3,905 contracts outstanding, and the block trade of 30,000 puts at $140 (expiring October 2025) adds a layer of intrigue. This isn’t just a retail-driven frenzy—it’s a structural bet that PEP could face a 9% pullback. That’s a red flag for aggressive bulls but a green light for those looking to hedge long positions.

News Flow: Innovation vs. Margin Pressures

PepsiCo’s recent headlines are a mixed bag. The “Simply NKD” reformulations and cage-free egg sourcing are textbook ESG wins, which should buoy institutional sentiment. But the three factory closures and $4B stake by Elliott Management tell a different story. Activist investors aren’t here to cheer—they’re here to shake things up. The push to spin off bottling operations could either unlock value or disrupt operations. For now, the stock is treating these as tailwinds, but keep an eye on earnings revisions if production cuts bite into margins.

Trade Ideas: Calls for Conviction, Puts for Caution

If you’re bullish, the PEP241018C150 call (expiring Friday) is your best bet. With 5,046 contracts outstanding and PEP trading just $2.45 below the strike, this is a high-liquidity play for a short-term pop. A breakout above $149.22 (30D support/resistance) could trigger a run to $155.44 (upper Bollinger Band). For a longer-term angle, the PEP241019C150 (next Friday’s expiry) offers a cheaper entry if you’re patient.

On the bearish side, the PEP241018P145 put (3,905 OI) is your insurance policy. If PEP dips below $143.00 (30D support), this strike could act as a floor. But don’t overcommit—RSI at 33 suggests a rebound is likely unless the 200D MA ($142.26) breaks.

For stock traders, consider entry near $142.70 (30D support) with a tight stop just below $142.26. A close above $149.22 would validate the bullish case, with $155.44 as a stretch target. If the Elliott-driven restructuring rumors heat up, tighten stops to $140.50 to protect gains.

Volatility on the Horizon: Balancing Bullish OI and ESG Risks

The next 30 days will test PEP’s resolve. The options market is pricing in a 15–20% move, but the news flow is more nuanced. While ESG wins and shareholder returns are positives, the factory closures and reformulation costs could drag on margins. The key is watching the 200D MA ($142.26) like a hawk. If it holds, the stock could retest the $155.44 upper band by year-end. If it breaks, the $131.43 (200D support) becomes a critical level.

Bottom line: This isn’t a “buy and hold” setup. It’s a high-conviction trade with clear entry/exit points. The options data screams for a short-term call play, but the block trades and news flow demand a cautious approach. Position accordingly—and don’t let the 1.1% pop today blind you to the risks ahead.