PEP Options Signal Bullish Bias: Key Strikes at $150 and $135 Highlight Risk/Reward for Traders

• PEP trades at $147.3, down 0.58% from $148.16, with intraday support near $144.08 (Bollinger Bands).
• Call open interest dominates at $150 and $155 (expiring 12/26), while puts pile up at $135.
• A $10.2M block trade sold 30,000 puts at $140 (exp 10/17), hinting at strategic downside protection.

Here’s what the options market is whispering: PEP’s open interest shows a clear tilt toward bullish bets, but the puts at $135 suggest a wariness about a deeper pullback. Let’s break it down.The Bull-Put Tightrope: Where Institutional Money Is Leaning

Options traders are stacking calls at $150 and $155 (expiring this Friday) with open interest of 1,286 and 571 contracts respectively. That’s not just noise—it’s a vote of confidence in PEP breaking above $148.98 (intraday high). Meanwhile, puts at $135 (OI: 786) act like a safety net for bears, pricing in a worst-case scenario.

The block trade selling PEP20251017P140 puts for $140 strike (expiring Oct 17) is telling. It’s a massive bet that PEP won’t crater below $140, aligning with the 200D support zone ($131.41–$131.97). Think of it like a hedge fund saying, “We’re comfortable holding PEP here, but we’ll insure against a black swan.”

News That Could Tip the Scales

PEP’s recent earnings beat ($2.12 EPS) and upgraded institutional stakes (like Brighton Jones’ 16.4% boost) are bullish. But the stock’s four-day slide and a MACD histogram dipping below zero (0.11) signal short-term fragility. The 3.8% dividend yield is a lure, but a payout ratio of 108% means any earnings dip could strain that payout.

Your Playbook: Calls, Puts, and Precision Entries

For options:

• Bullish: Buy PEP20251226C150 (strike $150, exp 12/26) if PEP closes above $148.50 today. The $150 level is a psychological hurdle with heavy OI to push it higher.
• Bearish: Buy PEP20251226P135 (strike $135, exp 12/26) as insurance if PEP tests the 30D support ($144.86).

For stock:

• Entry: Consider buying PEP near $144.71 (institutional support level) with a stop-loss at $142.64.
• Target: If PEP holds above $144.08 (lower Bollinger Band), aim for a rebound to $148.08 (middle band) or the 30D MA at $147.25.

Volatility on the Horizon: What to Watch

PEP sits at a crossroads. The options market is pricing in a 3.5% move either way by early January, but the block trade and 200D support suggest a floor around $131.41. If PEP’s RSI (46) crosses above 50 and MACD (0.79) stays above its signal line, the bulls could reclaim $150. But watch for a breakdown below $144.08—it could trigger the puts at $135 and force a reevaluation of long-term bullish bets.

The key takeaway? PEP’s options and fundamentals are in a tug-of-war. The calls at $150 and puts at $135 frame a tight trading range, but the block trade and dividend yield hint at a floor. Play it like a chess game: stack calls for a breakout, but keep puts handy if the market’s mood shifts.

Final note: Always adjust stop-loss levels as the stock approaches key support/resistance. The market’s mood can flip faster than a Dorito in a wind tunnel.