Costco's $1,000 Call Frenzy: Why Bulls Are Betting Big and How to Play It

• Costco (COST) surges 0.3% to $944.53, trading near 200-day SMA
• Options market shows 5200 open calls at $1,600 strike vs. 3,128 puts at $900
• RSI near overbought 81.7 and MACD divergence hint at potential breakout

Here’s the deal: Costco’s options market is screaming bullish. With call open interest spiking at $1,000+ strikes and technicals lining up for a breakout, this isn’t just noise—it’s a setup. Let’s break down why this could be your next trade.

The Call-Put Imbalance: A Bullish Bet on $1,000

Costco’s options chain tells a clear story. This Friday’s $1,600 call (COST20260116C1600) has 5,200 open contracts—the highest of any strike. That’s not just retail hype; it’s institutional money betting on a sharp move. Meanwhile, puts dominate at $900 (COST20260116P900) with 3,128 OI, suggesting hedgers are bracing for a dip. The put/call ratio of 0.845 (calls > puts) confirms the bias. But here’s the catch: those $1,600 calls are 70% out-of-the-money. If Costco fails to break $950, those bets could turn into losses. Block trading shows no whale moves today, so this is pure options-driven momentum.

News That Backs the Bull Case

Costco’s December sales growth (8.5% YoY) and digital sales surge (19% growth) are fueling this rally. Analysts have bumped price targets to $1,040, and institutional buyers added 1.2% to their holdings in Q3 2025. The challenge? A P/E of 50.66 is rich for retail. But here’s the kicker: options activity aligns with fundamentals. That $1,000 call (COST20260116C1000) with 3,026 OI isn’t just optimism—it’s a bet on continued e-commerce growth and membership retention (93% in the U.S.). If consumer spending holds, this could be a clean trade.

Actionable Strategies: Calls, Breakouts, and Stops

For options traders: The COST20260116C950 call (2075 OI) is your best near-term play. With Costco trading at $944.53, this $950 strike gives you a 0.5% buffer to break even. If you want more time, the COST20260123C960 (677 OI) offers a tighter risk-reward. For stock buyers, target an entry near $941 (30D support) with a stop below $938. Your first target is $955 (intraday high), then $965 (next resistance). But watch that 200-day SMA at $950.34—it’s a key level. If it breaks, the $1,000 calls could take off.

Volatility on the Horizon: Navigating Costco’s Bullish Crossroads

Costco’s at a crossroads. The RSI at 81.7 and MACD divergence suggest overbought conditions, but institutional buying and strong sales data keep the bullish case alive. The real risk? A pullback below $921 (30D support) would trigger panic. But if the stock holds $941 and breaks $955, this could be a 5-7% move in days. The options market isn’t just betting on growth—it’s pricing in a breakout. Your call: Ride the $950 call or play the stock’s next push. Either way, the setup is clear.