Pepsico (PEP, news, chart) is seeing three times its normal trading volume on covered call writing. The stock is up 50 cents to $70.31 and 24,000 PEP calls have traded, compared to 6,300 puts. The day’s top trade is an order for 17,000 January 72.5 calls that traded midmarket for $2.30 a contract. Within minutes, a block of 714,000 PEP shares traded for $70.31. The action appears to be part of a substantial buy write (where the strategist have an existing position in PEP shares). If so, the sale of the calls lowers the cost basis of owning the stock. The position also offers limited upside (6.6 percent), to $72.50 a share (strike price of short calls) at expiration.