Market News

November 19, 2013  Tue 4:14 AM CT

Pepsico has been steadily working its way higher for more than a month, and one investor is repositioning for a continued rally.

optionMONSTER's Heat Seeker system detected the sale of 2,950 April 85 calls for the bid price of $3.10 and the purchase of 2,950 April 90 calls for the ask price of $1.20. Volume was below open interest in the lower strike but above it in the higher contracts.

This indicates that a trader is rolling a position higher, reflecting recent gains in the shares, while taking some profits off the table. The new long calls lock in a $95 purchase price for the stock no matter how far it might rise, but they will expire worthless if shares remain below that level through mid-April. (See our Education section)

PEP slipped 0.2 percent yesterday to close at $85.86. The snack and beverage giant bounced off support at its 200-day moving average around $79 in early October and has been trending higher since reporting third-quarter results about a week later.

Total PEP calls outnumbered puts by 4 to 1.
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