Shares of PepsiCo Inc (NASDAQ:PEP) are trading down 0.5% at $167.21 this afternoon, with traders gearing up for the company's third-quarter earnings, which are due out before the open tomorrow, Tuesday, Oct. 8. PEP is eyeing its fourth consecutive daily drop, its latest pullback dragging the shares below the year-to-date breakeven mark. The equity is also trapped below a confluence of key moving averages, with the 10-day pressing sharply overhead.
Over the past two years, PEP has tended to outperform after earnings, finishing six of its eight next-day sessions higher, averaging a move of 2.3%. This time around, options traders are anticipating a higher-than-usual post-earnings shift of 4.7%, regardless of direction.
Options traders are gearing up for the event, too, with double the average trading volume being seen in the options pits. An impressive 17,000 calls and 17,000 puts have been traded so far, with the weekly 10/11 160-strike put and 175-strike call from the same series most popular.
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