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PEP Covered Call Strategy: Is Now a Good Time to Sell Calls? Moderate · 63/100
PepsiCo Inc (Consumer Defensive) · $142.08 ·
Analysis generated Aug 21, 2026 ·
Data as of market close Aug 21
Quick Take
PEP is trading at $142.08 with RSI at 58 (neutral territory). Options IV is at 20% — 54% below its 30-day average of 44%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
58
IV Today
20.5%
IV vs 30d Avg
-54%
MACD
bullish
ADX
12
MFI
60
The Setup
PEP Covered Call
LONG STOCK
100 shares @ $142.08
SHORT CALL
$155 Oct '26 · $1.37/sh
Net Cost
$14,071
Max Profit
+$1,429
Break-even
$140.71
Projected P&L at Target
+$1,429
(10.2%)
P&L at Expiry
P&L Scenarios
What happens at different PEP prices by expiry:
| PEP Price | Today | Sep 8 | Sep 27 | Oct 16 (exp) |
|---|---|---|---|---|
| $114 (-20%) | -$2,705 | -$2,705 | -$2,705 | -$2,705 |
| $121 (-15%) | -$1,996 | -$1,994 | -$1,994 | -$1,994 |
| $128 (-10%) | -$1,296 | -$1,287 | -$1,284 | -$1,284 |
| $135 (-5%) | -$623 | -$592 | -$575 | -$573 |
| $139 (-2%) | -$248 | -$196 | -$156 | -$147 |
| $142 (0%) ← now | -$15 | +$52 | +$116 | +$137 |
| $145 (+2%) | +$200 | +$284 | +$374 | +$421 |
| $149 (+5%) | +$485 | +$590 | +$719 | +$847 |
| $155 (+9%) ← target | +$795 | +$914 | +$1,072 | +$1,429 |
| $163 (+15%) | +$1,085 | +$1,193 | +$1,321 | +$1,429 |
| $171 (+20%) | +$1,215 | +$1,298 | +$1,379 | +$1,429 |
Why This Strategy, Why Now
- RSI at 58 — neutral-bullish
- IV -54% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 12 — range-bound, perfect for selling calls
- TTM Squeeze ON — breakout imminent, risky for capped strategies
Key Risks
PEP has bullish momentum (MACD). If a positive catalyst emerges (earnings beat, product launch), the stock could gap past your strike. Consider rolling the call up if PEP approaches the strike before expiry.
TTM Squeeze is ON — a volatility breakout may be imminent. If the breakout is to the upside, your short call will be tested quickly.