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Buyers look for Pepsi to bubble higher

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Pepsi has pulled back slightly from a recent resistance level, but traders are looking for its shares to keep rising in the first half of next year.

About 1,800 July 75 calls have traded in a strong buying pattern for $0.85, according to optionMONSTER's Heat Seeker tracking system. The volume wasn't huge for this name but is still above the open interest of just 252 contracts at the strike, so these are new purchases.

PEP is up fractionally at $70.08 in midday trading. Shares of the snack and beverage giant had been climbing since mid-November but ran into resistance around $70.50.  

Today's call buyers are betting that PEP will gain roughly 8 percent by expiration in mid-July 2013. If the stock is below the $75 strike price at that time, the calls will expire worthless.

Overall option volume is well under its daily average, but calls outnumber puts by 2.5 to 1.

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