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PEP Covered Call Analysis: Proceed With Caution Weak · 55/100
PepsiCo Inc (Consumer Defensive) · $137.38 ·
Analysis generated Jul 10, 2026 ·
Data as of market close Jul 10
Quick Take
PEP is trading at $137.38 with RSI at 40 (oversold territory). Options IV is at 20% — 54% below its 30-day average of 43%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
40
IV Today
19.9%
IV vs 30d Avg
-54%
MACD
bullish
ADX
20
MFI
41
The Setup
PEP Covered Call
LONG STOCK
100 shares @ $137.38
SHORT CALL
$150 Sep '26 · $1.47/sh
Net Cost
$13,591
Max Profit
+$1,409
Break-even
$135.91
Projected P&L at Target
+$1,409
(10.4%)
P&L at Expiry
P&L Scenarios
What happens at different PEP prices by expiry:
| PEP Price | Today | Aug 3 | Aug 26 | Sep 18 (exp) |
|---|---|---|---|---|
| $110 (-20%) | -$2,602 | -$2,601 | -$2,601 | -$2,601 |
| $117 (-15%) | -$1,920 | -$1,915 | -$1,914 | -$1,914 |
| $124 (-10%) | -$1,252 | -$1,234 | -$1,227 | -$1,227 |
| $131 (-5%) | -$620 | -$574 | -$544 | -$540 |
| $135 (-2%) | -$272 | -$202 | -$144 | -$128 |
| $137 (0%) ← now | -$57 | +$30 | +$113 | +$147 |
| $140 (+2%) | +$142 | +$245 | +$355 | +$422 |
| $144 (+5%) | +$407 | +$530 | +$677 | +$834 |
| $150 (+9%) ← target | +$705 | +$843 | +$1,018 | +$1,409 |
| $158 (+15%) | +$988 | +$1,118 | +$1,268 | +$1,409 |
| $165 (+20%) | +$1,131 | +$1,238 | +$1,342 | +$1,409 |
Why This Strategy, Why Now
- RSI at 40 — oversold, not ideal for selling calls
- IV -54% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 20 — range-bound, perfect for selling calls
- No squeeze — no imminent breakout
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.