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September 19, 2013  Thu 4:14 AM CT

PEP: SEE CHART GET CHAIN FIND STRATEGIES
A bullish trader is repositioning for more gains in Pepsico by next spring.

optionMONSTER's Heat Seeker system detected the sale of 2,500 January 80 calls for $3.50 and the purchase of about 3,000 April 85 calls for $2.12 to $2.14 yesterday. Volume was below open interest in the January options but above it in the April contracts, indicating that a long-call position was being rolled forward to a higher strike.

The adjustment keeps the investor in the trade for an additional three months and is especially bullish because the position is being raised by $5. The new calls lock in the price where the stock can be purchased through mid-April no matter how far it might climb, but they will expire worthless if shares remain below $85. (See our Education section)

PEP rose 1.49 percent to $82.88 yesterday, climbing back above its 50-day moving average. The food and beverage giant fell sharply from above $85 in the first half of August but has been rising in recent days after holding support at the $79 level.

Total option volume in the named topped 12,400 contracts yesterday, 2.5 times its daily average for the last month. Overall calls outnumbered puts by more than 6 to 1. 
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Options Academy: Ron's Risk Calculation--A Real Life Example

It is rare that I get a chance to give a real-life, real-time example in my articles that the readers were not only following but were actually involved in at the time the event is happening. Well, that is where we are right now in our QQQ trade from last week. Let's recap the trade itself.

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