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Why PEP Is an Excellent Covered Call Candidate Right Now Strong · 78/100
PepsiCo Inc (Consumer Defensive) · $139.56 ·
Analysis generated Jul 31, 2026 ·
Data as of market close Jul 31
Quick Take
PEP is trading at $139.56 with RSI at 50 (neutral territory). Options IV is at 20% — 56% below its 30-day average of 46%. Neither RSI nor IV strongly favor selling calls right now. Consider waiting for better conditions or using a different strategy.
Technical Signals
RSI (14)
50
IV Today
20.3%
IV vs 30d Avg
-56%
MACD
bullish
ADX
16
MFI
44
The Setup
PEP Covered Call
LONG STOCK
100 shares @ $139.56
SHORT CALL
$150 Sep '26 · $1.51/sh
Net Cost
$13,805
Max Profit
+$1,195
Break-even
$138.05
Projected P&L at Target
+$1,195
(8.7%)
P&L at Expiry
P&L Scenarios
What happens at different PEP prices by expiry:
| PEP Price | Today | Aug 17 | Sep 2 | Sep 18 (exp) |
|---|---|---|---|---|
| $112 (-20%) | -$2,640 | -$2,640 | -$2,640 | -$2,640 |
| $119 (-15%) | -$1,944 | -$1,942 | -$1,942 | -$1,942 |
| $126 (-10%) | -$1,257 | -$1,248 | -$1,245 | -$1,245 |
| $133 (-5%) | -$599 | -$567 | -$549 | -$547 |
| $137 (-2%) | -$236 | -$182 | -$139 | -$128 |
| $140 (0%) ← now | -$14 | +$56 | +$123 | +$151 |
| $142 (+2%) | +$188 | +$274 | +$367 | +$430 |
| $147 (+5%) | +$449 | +$553 | +$681 | +$849 |
| $150 (+7%) ← target | +$625 | +$736 | +$877 | +$1,195 |
| $154 (+10%) | +$767 | +$877 | +$1,012 | +$1,195 |
| $160 (+15%) | +$953 | +$1,043 | +$1,135 | +$1,195 |
| $167 (+20%) | +$1,046 | +$1,109 | +$1,162 | +$1,195 |
Why This Strategy, Why Now
- RSI at 50 — neutral-bullish
- IV -56% vs avg — premiums below average, less income
- MACD bullish — stock has upward momentum
- ADX at 16 — 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.