PepsiCo will invest $550 million in Celsius Holdings for an 8.5% stake in the company
PepsiCo, Inc. (NASDAQ:PEP) is in the spotlight today, after agreeing to invest $550 million in Celsius Holdings (CELH) for an 8.5% stake. The deal also has also enabled PepsiCo to take over the company’s U.S. energy drink distribution, and to nominate a director to serve Celcius’ board. At last check, PEP is up 1% to trade at $176.78.
Options bulls are taking notice, with 21,000 calls across the tape so far — double the intraday average — as opposed to just 4,047 puts. Most popular by far is the 8/5 180-strike call, where positions are currently being opened, followed distantly by the September 180 call.
The equity has fared extremely well since its last earnings report, which culminated in a beat-and-raise. In fact, the shares earlier today hit a fresh all-time high of $177.69, and are now eyeing their third-straight win. The 20-day moving average has been supporting the security since late June, and longer term PEP sports a 12.6% year-over-year lead.
Options look like an attractive route at the moment. This is per the security’s Schaeffer’s Volatility Index (SVI) of 16%, which sits in the relatively low 23rd percentile of readings from the last 12 months, meaning options traders are currently pricing in low volatility expectations for the equity.
Image and article originally from www.schaeffersresearch.com. Read the original article here.