Costco (COST) Options Signal $870 Put Defense and $950 Call Resistance: Here’s How to Play the Volatility

• Costco’s stock (COST) is trading at $908.27, up 1.56% from its previous close, but technical indicators like RSI (28.89) and MACD (-10.43) hint at lingering bearish pressure.
• Options market sentiment is split: 1,629 puts at $870 (this Friday’s expiry) suggest heavy downside protection bets, while 903 calls at $950 reflect cautious optimism.
• Analysts at Talkmarkets peg Costco’s intrinsic value at $1,055, but its 30-day support level ($893) and 200-day MA ($966.61) create a tight trading range.

The big picture? Costco’s options activity and technicals paint a tug-of-war between bears eyeing a pullback and bulls testing breakout levels. Let’s break it down.The Battle for $870 and $950: What Options Reveal About Sentiment

Options open interest tells a story of caution. For this Friday’s expiry (2025-11-28), puts at $870 (OI: 1,629) and $850 (OI: 1,427) dominate, signaling traders are hedging against a sharp drop. Meanwhile, calls at $950 (OI: 903) and $920 (OI: 1,022) show some bullish conviction—but not enough to offset the bearish skew. The put/call ratio (0.898) for open interest leans slightly bearish, but it’s not extreme.

A notable block trade—COST20250926P942.5 (sell put, 80 contracts, $98,400 turnover)—hints at institutional players betting Costco won’t fall below $942.50 before September 2025. This could act as a short-term floor, but only if the stock holds above its 30-day support ($893).

News vs. Options: Can Costco’s Fundamentals Outpace the Bearish Bets?

Costco’s recent moves to expand Kirkland Signature products and offset tariff pressures are bullish, and its intrinsic value calculation ($1,055) suggests long-term upside. But the stock’s current valuation—P/E of 49.2x (vs. industry average 20.9x)—means the market has already priced in aggressive growth.

The options market isn’t fully aligned with this narrative. While puts at $870 imply fear of a selloff, the news about Walmart’s weak Sam’s Club sales and insider purchases (Rep. Cisneros’s buy) could fuel a rebound. The key question: Will Costco’s operational strengths outweigh its technical headwinds?

Actionable Trade Ideas: Calls, Puts, and Precision Entries

For options traders, the most compelling setups are:

• Bullish: Buy COST20251128C950 (next Friday’s expiry) if COST breaks above $912.83 (Bollinger Middle Band). Target: $950 (OI-heavy level), with a stop-loss below $900.
• Bearish: Buy COST20251128P870 if the stock dips to $900. Target: $882 (Bollinger Lower Band), with a tight stop above $905.

For stock traders, consider:

• Entry near $895–$900 if support holds. Target: $939–$943 (200D MA and Bollinger Upper Band).
• Exit near $930–$940 if resistance breaks, or cut losses below $890.

Volatility on the Horizon: Balancing Risk and Reward

Costco’s options activity and fundamentals are at a crossroads. The bears have fortified the $870 level, while bulls are testing $950 as a psychological hurdle. With the stock trading near its 30-day support and a fair value estimate of $1,055, there’s room for both sides to win—or lose.

Your edge? Watch the $912.83 Bollinger Middle Band as a pivot. A close above it could trigger a rally toward $950, validating the calls. A break below $900 would validate the puts. Either way, the options market has already priced in extremes—so the real action might be in the middle.

Final thought: This isn’t a binary bet. Costco’s story is about resilience—whether it’s in its supply chain, membership model, or options positioning. Play it with precision, and you might just ride the volatility to profit.