In a surprising turn of events, Coca-Cola (NYSE:KO) and PepsiCo (NASDAQ:PEP) witnessed notable options activity on Wednesday, raising questions about investor sentiments and potential market shifts. The unusual occurrence, involving nine active options expiring in 22 days, has left market observers intrigued.
Newfound Interest in Options Trading
For an options novice, the sudden surge in activity presents an intriguing puzzle. With limited options experience starting in February 2022, the author reflects on the learning curve and the expanding horizon that comes with exploring different investment strategies.
Curiosity Surrounding Coke and Pepsi Stocks
Despite the festive season prompting increased consumption of Coke and Pepsi products, I am puzzled by the heightened options activity in the two beverage giants. The unusual aspect is that all nine options expire within a relatively short timeframe, adding to the mystery surrounding investor behavior.
Examining Trading Volumes
Taking a closer look at the share volumes on Wednesday, both Coca-Cola and PepsiCo exhibited trading volumes below their respective 65-day averages. However, the options volumes for both stocks were notably higher than their 30-day averages, suggesting increased investor interest in exploring potential positions.
Navigating the 52-Week Highs
Amidst the ongoing Santa Claus rally, where the Nasdaq 100 hit a record high, options activity appears specific to Coca-Cola and PepsiCo rather than a broader beverage market trend. Both companies had reached their 52-week highs in April and May, respectively, displaying a certain synchronicity in their stock performances.
Speculations and Conclusions
Despite the lack of concrete news explaining the surge in options activity, the author speculates on potential bearish sentiment reflected in Bear Put Spreads and suggests that some investors see value in Coca-Cola at its current price levels. The conclusion raises intriguing questions about the dynamics between Coke and Pepsi in the options market, promising further attention in the future.
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