We have an open put on PepsiCo expiring tomorrow, 05/16/2025. The put is nearly $5 in the money. There’s an opportunity to roll it down that $5 for a net credit by going out a couple of months to 07/18/2025. So that’s what I did.
PepsiCo raised their dividend from $5.42 to $5.69 while we were holding the previous put, a nearly 5% increase. This is the sort of dividend increase that we are relying on as part of our strategy. But we don’t want to overpay. In the table below the “option price” is the net credit generated from the roll, so our annualized return is lower than usual.
| Option Type | Short Put (STO) |
| Date of Sale | 05/15/2025 |
| Option Sold | -PEP250718P130 |
| Expiration Date | 07/18/2025 |
| Days to Expiration | 64 |
| Number Sold | 1 |
| Premium per Contract | $75.00 |
| Total Premium Received | $75.00 |
| Potential Liability/Cash Put Reserve | $13,000.00 |
| Company Ticker | PEP |
| Stock Price at time of Put sale | $130.71 |
| Strike Price | $130.00 |
| Cost per Share if Assigned | $129.25 |
| Discount to Current Price If Assigned | 1.12% |
| Annual Dividend | $5.69 |
| Dividend Yield at Current Price | 4.35% |
| Dividend Yield on Cost if Assigned | 4.40% |
| Net ROI on Reserve If Not Assigned | 0.57% |
| Annualized ROI on Reserve If Not Assigned | 3.27% |