PepsiCo Stock Gains Ground on SodaStream Buyout News

PepsiCo put buyers are getting a good deal at the moment

by Emma Duncan

Published on Aug 20, 2018 at 9:59 AM
Updated on Jun 24, 2020 at 10:16 AM

Shares of PepsiCo, Inc. (NASDAQ:PEP) are up 0.6% at $115.59 in early trading, after the beverage powerhouse announced its purchase of at-home carbonated drinkmaker SodaStream (SODA) for $3.2 billion in cash, or $144 per SODA share. SODA stock, meanwhile, has jumped 9.6% to trade at $142.34.

PEP has had a volatile year on the charts, bottoming out at a two-year low in early May, and surging to a six-month peak above $118 earlier this month. And despite its recent pullback, support was quickly found at the 320-day moving average, a level which previously acted as a floor for the stock in late 2017. In spite of this, the shares of Pepsi are just 3.8% lower year-to-date.

Digging into options, near-term traders have been more put-heavy than usual toward PepsiCo stock. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.07, which ranks in the 81st percentile of its annual range.

Those currently purchasing premium on short-term puts are in luck. This is per the stock's Schaeffer's Volatility Index (SVI) of 14%, which ranks in the low 25th percentile of its annual range. This suggests that muted volatility expectations have been priced into short-term PEP options.


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