Learn the trade here. Make it on tradeMONSTER

Options Trading News

November 19, 2013  Tue 4:14 AM CT

PEP: SEE CHART GET CHAIN FIND STRATEGIES
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.
Share this article with your friends


Premium Services

Free Webinars

Education & Strategy

Why traders hedge with sector ETFs

Many people who are not familiar with options think that they increase risk, but their first and primary purpose is...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER