PEP Options Signal Bullish Bias: Target $150 Calls as Short-Term Volatility Peaks

• PEP trades at $144.22, down 1.9% from $147.05, with intraday lows near $143.61
• Call open interest dominates at $150 and $152.5 strikes, while puts cluster at $135
• Block trade of 30,000 puts at $140 suggests institutional floor-seeking

Here’s what the data tells us: PEP is caught in a tug-of-war between short-term bearish momentum and long-term bullish fundamentals. The options market is pricing in a potential rebound above $150, but near-term support at $144 could determine whether this dip becomes a buying opportunity or a deeper correction.

Where the Money Is Flowing: Calls at $150, Puts at $135

The options chain reveals a clear imbalance: 1,379 open calls at $150 (this Friday’s expiration) versus 786 puts at $135. This suggests traders are hedging for a rebound or speculating on a breakout. The block trade of 30,000 puts at $140 (expiring Oct 17) is telling—someone is betting the stock won’t fall below $140, possibly to lock in a purchase price or protect a short position.

But here’s the catch: while the 30D moving average at $147.38 acts as a psychological hurdle, the RSI at 45.48 shows the stock isn’t oversold. This means a bounce could be weak unless volume surges. The heavy call interest at $150 implies a key inflection point—if PEP closes above $150 this week, the bearish trend could reverse. Conversely, a break below $144.17 (lower Bollinger Band) might trigger more panic selling.

News That Could Shift the Script

PepsiCo’s 3.87% dividend yield and Q3 earnings beat ($2.29 vs. $2.26) keep long-term bulls optimistic. But recent institutional moves—like Yousif Capital and Welch Group cutting stakes—add short-term uncertainty. The SPYM ETF’s 1.9% decline in PEP exposure also hints at reduced institutional conviction.

The block trade at $140 might be a lifeline for those expecting a rebound, but it’s not a guarantee. If the stock tests $144 and holds, the dividend appeal and analyst upgrades (JPMorgan’s $164 target) could reignite buying. However, a breakdown below $131.41 (200D support) would force a reevaluation of the bullish thesis.

Trade Ideas: Calls at $150, Puts at $144

For options: Buy PEP20260102C150 (next Friday’s $150 call) if PEP closes above $147.08 today. The strike is in play if the 30D MA ($147.38) holds. For downside protection, consider PEP20251226P144 (this Friday’s $144 put) if the stock dips to $143.61.

For stock: Enter near $144.17 (lower Bollinger Band) with a stop-loss below $143.61. Target zones are $148 (30D MA) and $152.5 (call-heavy area). If the 200D MA at $142.08 breaks, tighten stops to $140.

Volatility on the Horizon

The next 48 hours will test PEP’s resolve. A close above $147.08 could trigger a rally toward $150, validating the call-heavy options bets. But a sustained drop below $144.17 would force a reevaluation of the long-term bullish case. Either way, the $140–$152.5 range is where the action will unfold. Stay nimble—this stock isn’t done surprising us yet.