Costco (COST) Options Signal Bullish Breakout Potential: Key Strikes and Strategies for Q4 2025

• Costco’s stock (COST) trades near $924, down 0.07% intraday but above key 30-day support at $910.94.
• Options data shows heavy call open interest at $950 and $930, while puts dominate at $900 and $902.50, hinting at a bullish/bearish tug-of-war.
• Block trades and news of new Canadian expansions and membership upgrades suggest Costco’s long-term story remains intact.

Here’s the core insight: Costco’s options market is pricing in a high-probability upside breakout, but technicals and macro risks (tariffs, supply chain issues) mean traders need to balance aggression with caution. Let’s break it down.

Bullish Calls vs. Bearish Puts: Where the Money Is Flowing

The options chain tells a tale of two camps. For Friday’s expirations, call open interest peaks at $950 (1,222 contracts) and $930 (939 contracts), while puts dominate at $900 (2,330 contracts) and $902.50 (1,947 contracts). This suggests a split: retail traders are hedging downside risk, while institutions are betting on a rally above $930.

But here’s the twist: next Friday’s chain shows even more bullishness. The $950 call (1,894 OI) and $1,200 call (1,108 OI) are hotspots, while puts like the $875 (3,268 OI) and $880 (3,230 OI) signal deep bearish conviction. The put/call ratio of 0.94 (slightly bullish) leans toward calls, but the sheer volume of puts at $900+ means a sharp drop could trigger panic selling.

Then there’s the block trade: 80 puts sold at $942.50 expiring Sept 26, 2025. That’s a whale-sized bet that Costco won’t fall below $942.50 by mid-September. If the stock holds above $915 (intraday low), this trade could force a short-covering rally.

News That Could Tilt the Scales

Costco’s recent headlines are a mixed bag. The new Canadian Business Centre and Winnipeg warehouse signal aggressive expansion, which should boost revenue and member retention. Analysts’ $4.24 EPS forecast (up 11% YoY) and $21.75B October sales (up 8.6%) reinforce this narrative.

But don’t ignore the headwinds. Tariffs on imported goods are squeezing margins, and the popular product removal has already sparked member backlash. These issues could weigh on sentiment if earnings miss expectations or if the new membership policies backfire.

The key takeaway? Costco’s fundamentals are strong, but macro risks (tariffs, credit card processing changes) and short-term volatility (product cuts, policy shifts) mean the stock could swing wildly between $900 and $950 in the next month.

Actionable Trade Ideas: Calls, Puts, and Price Levels

For options traders, the most compelling plays are:

• Bullish Call Spread: Buy the COST20250926C950 (next Friday’s $950 call) and sell the COST20250926C970 to cap risk. If Costco breaks above $930 (middle Bollinger Band), the $950 call could see explosive gains.
• Bearish Put Play: Buy the COST20250926P900 (Friday’s $900 put) as a hedge. If the stock dips below $915, this put could act as insurance against a sharp drop.

For stock traders, consider:

• Entry Near $915–$916: If Costco holds above its intraday low, this is a strong support zone. Target a rebound to $930–$935 (middle Bollinger Band) or even $950 (call-heavy strike).
• Stop-Loss at $900: If the stock breaks below $900, it could trigger a cascade of puts and a test of the 200-day MA at $971.57.

Volatility on the Horizon: Positioning for Costco’s Q4 Moves

The next 30 days will be critical. Costco’s December 11 earnings report and ongoing expansion efforts could drive a breakout above $950. But if tariffs or supply chain issues worsen, the stock could retest $900.

Traders should watch for option expiration-driven moves this Friday and next. The $950 call and $900 put are your best bets for directional plays, while the $930–$935 range offers a balanced entry for those who want to ride the long-term bull case.

In short: Costco’s story is still bullish, but the path to $1,000 isn’t without potholes. Stay nimble, and let the options market guide your risk management.