PEP Options Signal Bullish Setup: $160 Call OI Surge and Whale Put Block Trade Point to Strategic Entry Zones

• PEP trades at $145.22, up 0.14% with volume surging past 2.3M shares
• Options data shows 0.63 put/call OI ratio, with $160 call OI exploding to 13,927 contracts
• Massive $10.2M block trade sells 30,000 puts at $140 strike ahead of October 17 expiry

Here's the deal: PEP's options market is screaming about a potential breakout. The call/put imbalance and whale activity suggest smart money is positioning for a rally - but there's a twist in the put block trade that every trader should notice.

The OI Imbalance and Whale Moves Telling Us to Pay Attention

Let's start with the numbers that caught my eye. For next Friday's expirations, the $160 call option has 13,927 open contracts - that's 2.8x the next highest strike at $155. Meanwhile, the put side shows heavy interest at $140 ($1105 OI) and $135 ($3862 OI).

This isn't random. The call skew suggests big players are hedging a bullish bet, while the put concentration at $140 indicates some are bracing for a drop below key support levels. But the real drama is in that $10.2M block trade selling 30,000 puts at $140. That's like seeing a whale in the ocean - it means someone with deep pockets is making a calculated move.

Why This Options Setup Matters for PEP Traders

The $160 call OI surge aligns with technical levels. PEP's 200-day MA at $142.29 is a critical support line, and the RSI at 34 suggests we're near oversold territory. If the stock breaks above the intraday high of $146.69, those call buyers could get a nice pop.

But don't ignore the put block trade. Selling 30,000 puts at $140 means someone is either:

• Hedging a large long position
• Shorting volatility ahead of earnings
• Preparing to accumulate shares at a discount

The News Flow That Could Fuel or Hinder This Setup

PEP's fundamentals are solid. The 3.92% dividend yield and 37% ROE are impressive, and their pivot to plant-based and low-sugar products is smart. But the recent dip below the 50-day MA ($147.02) has analysts split - is it a buying opportunity or a red flag?

The block trade at $140 becomes interesting when we consider the news. With Freedom Capital maintaining a Hold rating and concerns about saturated markets, the put sellers might be positioning for a pullback. Yet the bullish options flow suggests the market isn't buying the bear case just yet.

Actionable Trade Ideas for PEP

For options traders:

• This Friday: Buy the $147 call if PEP breaks above $146.69. Target $150 with a stop below $145.50
• Next Friday: Buy the $160 call if PEP holds above $143.93. Target $165 with a stop below $140

For stock traders:

• Consider entry near $143.93 (intraday low) if support at $142.70 holds. Target $147.50 (middle Bollinger Band) with a stop at $140
• Alternatively, short the stock at $146.69 with a target at $143.93 if the $140 put block trade triggers a selloff

Volatility on the Horizon: Balancing Bullish Momentum and Strategic Caution

The key takeaway? PEP is at a crossroads. The options data shows a clear bullish bias, but the whale put trade adds a layer of caution. If the stock can hold above $143.93, the $160 call buyers could see significant gains. But if the $140 put block trade triggers a cascade of selling, we might see a test of the 200-day MA.

Either way, the coming days will tell us if this is a classic breakout setup or a bear trap. Keep an eye on the $145.22 level - it's the current price and could become a psychological pivot point.

Remember, the market is always telling a story through options flow and volume. Right now, PEP's story has both bullish momentum and bearish caution - and that's where the real opportunities lie.