But, in your own example you have a useless use of cat:
cat $FILENAME | sed $SEDOPTIONS "s/$SEARCHTERM/$REPLACEMENT/g"
sed $SEDOPTIONS "s/$SEARCHTERM/$REPLACEMENT/g" < $FILENAME
With the useless use of cat, that is no longer possible even if there is a typo in the SEDOPTIONS.
But, in your own example you have a useless use of cat:
could be replaced with: