Shares of Keurig Dr Pepper Inc (NASDAQ:KDP) are 7.5% lower to trade at $32.49 this morning, after the company said it plans to buy Peet's Coffee parent JDE Peet's for $18 billion and then separate into two parts. One part will focus on coffee sales, while the other will move into cold beverage sales such as soda, energy drinks, and tea.
The news has not been well received, with KDP headed for its worst daily drop since March 2020. The equity has not only broken below the recently supportive $35 floor, but is now trading at its lowest mark since February. As a result, shares are clinging to a slim year-to-date gain
The options pits are buzzing today. So far 4,828 calls and 1,727 puts have been traded, or 7 times the average daily pace. Most popular are the September 32 and 33 calls, with new positions being opened at both.
Long-term options traders have been more bullish than usual toward the security of late. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), KDP's 50-day call/put volume ratio of 4.12 ranks higher 82% of readings from the past year.
Echoing this, short-term traders sport a call-bias. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 0.37, which sits in the 28th percentile of readings from the past 12 months. Should this bullish sentiment begin to unwind, it could trigger more headwinds for the beverage stock.
