Options Trading News

January 29, 2013  Tue 9:54 AM CT

Pepsico is at five-month highs after rising all month, and one trader is betting on a floor beneath the stock.

optionMONSTER's tracking systems detected the sale of 3,011 March 65 puts for $0.13 in less than a minute this morning. The volume was well above the strike's open interest of 1,737 contracts at the start of the session, indicating that this is a new position.

PEP is up 0.18 percent to $72.74 after reaching $72.86 earlier in the morning, its highest level since August. The beverage and snack giant ended December below $69 but gapped higher in the first session of 2013 and has been rallying ever since, rising above several key moving averages.

Today's put selling is looking for the stock to stay above $65, which was a key support level last spring. If PEP is above that strike price at expiration in mid-March, the trader will face the obligation to buy the shares. (See our Education section)
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As I stated in last week's article, a break out or a break down needs to have a couple things happen before it is considered a confirmed break out or break down. The only problem is that in today's market where things move much more quicker than they did just a few years ago, two days could wind up being the majority of the expected movement, if not the whole movement.

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