PEP Options Signal Bullish Bias: Key Strikes and Block Trades Point to Strategic Entry Zones

• Put/Call ratio of 0.58 (call-heavy open interest) hints at near-term bullish momentum.
• Block trade of 30,000 puts at $140 suggests institutional hedging ahead of ex-dividend date.
• Analyst upgrades to $170+ price targets clash with bearish MACD and RSI below 50.

Here’s the thing: PEP’s options market is whispering two conflicting stories. On one hand, heavy call open interest at $147–$148 (this week’s expiry) and $155 (next week) screams for upside. On the other, technicals show a short-term bearish trend with price near 200D MA support. But the real edge? That block trade at $140 puts—let’s unpack why this matters.

Where Institutional Money Is Flowing

Let’s start with the OTM options. This Friday’s call chain is packed: 1,466 contracts at $147, 1,390 at $148, and 493 at $152.5. That’s not random—it’s a strike wall that could push the stock higher if buyers step in. Meanwhile, puts at $143 (1,016 OI) and $141 (888 OI) show downside caution. But here’s the kicker: next Friday’s $155 call has 1,670 OI—the largest single strike in the chain. Big money is clearly pricing in a post-earnings pop or dividend-driven rally.

Then there’s that block trade: PEP20251017P140 sold 30,000 puts for $10.2M. Why? Maybe big players are hedging against a drop after the Dec 5 ex-dividend date. But here’s the twist: selling puts at $140 (below current price) implies they want the stock to stay above that level. If PEP holds 143.68–143.83 support, this could be a golden entry for longs.

News That Could Tip the Scales

Institutional buyers are piling in. Ascent Group and Virginia Retirement Systems added 36.7% and 50.3% to their PEP stakes, respectively. That’s $5.97M and $38.31M of fresh capital—enough to stabilize the float. Combine that with a 3.9% dividend yield (even if payout ratio is 108%) and analyst upgrades to $170, and you’ve got a recipe for short-term optimism.

But don’t ignore the technical headwinds. RSI at 48.5 and MACD below signal line suggest momentum is fading. If PEP breaks below 143.16 (intraday low), watch for a test of 131.62 (200D support). The bulls’ best bet? A rebound off Bollinger Bands’ lower band at $141.93—right where that $140 block trade starts to matter.

Actionable Setups for Today

For options traders:

• This Friday: Buy PEP20260102C147 if price breaks above $143.83 (resistance). Target: $147.5 (3% gain in 3 days).
• Next Friday: Buy PEP20260109C155 if volume surges past 1.5M. This is where big money is pricing in a post-holiday rally.

For stock players:

• Entry: Buy PEP near $143.68 (support zone) with a stop below $143.16.
• Targets: First, $147.20 (middle BB); second, $152.48 (upper BB).
• Alternative: Sell a put spread at $140–$135 if price drops below $143.68. Use the block trade as a floor.

Volatility on the Horizon

The next 72 hours will be critical. If PEP holds above $143.68 and volume spikes on the long side, the $147–$148 calls could ignite. But a breakdown below $141.93 would validate the bearish MACD and force reevaluation. Either way, the options market has already priced in a directional move—now it’s about timing the catalyst. Stay nimble, and let the data guide your next move.