Beverage Stock for Call Buyers to Bet On

Short-term options premiums on Keurig Dr Pepper look like an affordable buy

by Research Dept.

Published on Nov 26, 2019 at 12:37 PM
Updated on Nov 26, 2019 at 12:37 PM

Beverage stock Keurig Dr Pepper Inc (NYSE:KDP) has been moving higher on the charts long term, recently seeing an extra push from a volatile post-earnings bull gap earlier this month. The equity has since pulled back from its Nov. 7 record peak, but still remains at twice its 2016 lows, pointing to potentially strong technical footing for KDP. With additional support at the 10-month moving average, the equity is roughly 18% higher year-to-date, and looks ready to move even higher.


Short interest has soared 420% year-to-date, and now accounts for nearly 15% of the stock’s total available float, or 16.5 times the equity’s average daily trading pace. Further, seven of the 12 covering firms still sport a tepid "hold" or worse rating, meaning there remains plenty of room for upgrades on the stock.

Lastly, short-term options premiums on KDP look relatively cheap at the moment, based on the equity's Schaeffer’s Volatility Index (SVI) of 22%, which ranks in the 21st percentile of its annual range. Our recommended call has a leverage ratio of 7.5, and will double in value on a 13.1% rise in the underlying security.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this KDP commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

A Schaeffer's exclusive


Access your FREE insider report before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

3 Easy Ways to Play Options for Income
Trading options is often scary... but it doesn't have to be!
Video Game Makers ATVI, EA Receive Price-Target Raises
Both stocks have been strong in recent months
Call Traders Blast Delphi Technologies After BorgWarner Buyout
DLPH is on track for its best day ever
The Trend Minting Millionaires -- But Who Is Really Paying?
Porter Stansberry is making a concerning prediction.