Bulls Buy Pepsi Options After Forecast Boost

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David Russell, reporter for OptionMonster.

NEW YORK (TheStreet) -- Bullish traders are lapping up options in PepsiCo(PEP Quote) after Deutsche Bank(DB Quote) raised its earnings forecast for the beverage company.

Call volume surged almost 700% in the beverage and snack company, while PEP shares surged to levels last recorded during market crash in October. The busiest strike was the November 62.50 calls, which traded 5,724 times against open interest of 1,260 contracts. Most of the volume priced for 90 cents to $1, according to OptionMonster's proprietary tracking systems.

Pepsi rose 4.31% to $60.98 in early afternoon trading. Deutsche Bank said investors are too worried about depreciation costs going forward and that Pepsi will benefit from lower input costs and favorable currency trends.

The company is scheduled to report third-quarter results before the bell on Oct. 8.

Heat Seeker also detected unusual activity in the October 60 calls and the October 62.50 calls, although volume was below open interest in both strikes.

Overall options activity was more than three times greater than average. Calls outnumbered puts by 3 to 1.

-- Reported by David Russell of OptionMonster in New York.

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