Costco (COST) Options Signal Aggressive Bullish Bet: Here’s How to Play the $1,000 Call Surge and Key Support Levels

• Costco’s options market is skewed bullish, with heavy call open interest at $1,000 and $1,600 strikes ahead of Friday’s expiry.
• RSI near 81 and a MACD divergence hint at overbought conditions, but strong December sales and analyst upgrades keep momentum alive.
• Put activity clusters below $900, suggesting some hedging but no major bearish bets—yet.

The options market isn’t whispering caution. It’s shouting opportunity. With call open interest outpacing puts by a 1.14:1 ratio and bullish technicals, Costco’s stock is primed for a breakout—or a sharp correction if sentiment shifts. Let’s break down what traders should watch today.

Bullish Calls Dominate, But Risks Lurk Below Key Levels

The options chain tells a clear story: traders are betting big on the upside. For Friday’s expiry, the $1,000 call (COST20260116C1000) leads with 3,021 open contracts, followed by the $1,200 and $1,100 strikes. These strikes aren’t just random—they’re psychological thresholds. A close above $960 today could trigger a cascade of call buyers aiming to capitalize on the $1,000 level as a proxy for long-term optimism.

But don’t ignore the puts. The $900 strike (COST20260116P900) has 3,070 open contracts, acting as a soft floor. If the stock dips below $951 (today’s intraday low), that support could crumble, forcing some hedgers to the $860–$800 puts. The lack of block trades is a mixed blessing—no whales are moving mountains, but it also means no sudden shocks to destabilize the stock.

News Flow: Sales Surge vs. Legal Headwinds

Costco’s December sales report was a rocket boost: $29.86 billion in revenue and a 8.5% YoY jump. Analysts love it—Deutsche Bank’s “Buy” and J.P. Morgan’s $1,000 target are fuel for the bullish fire. But the lawsuit in Paramus, NJ, to block a new store and insider selling (though minor) add friction. Retail media expansion and membership growth are long-term tailwinds, but short-term traders care more about today’s $957.50 price and Friday’s expiry.

Actionable Trades: Calls for the Bold, Puts for the Pragmatic

If you’re bullish:

• Aggressive play: Buy the COST20260123C1000 call (next Friday expiry) at $1,000. The stock needs to rally 5.5% to $1,000 for profit, but with analyst targets in that range, it’s a high-risk/high-reward bet.
• Cautious play: Buy the COST20260116C960 call (Friday expiry) if the stock breaks above $962.50. A small move could trigger a pop in this strike.

If you’re hedging:

• Buy the COST20260116P900 put (3,070 OI) if the stock dips below $955. It’s cheap insurance against a breakdown.

For stock traders:

• Entry near $951–$953 if support holds. Target $965–$970 as the next level.
• Exit or tighten stops if the stock closes below $945 (200D support) or above $965 (Bollinger Band upper).

Volatility on the Horizon: Bullish Trends or a Correction?

Costco’s story is a tug-of-war between short-term optimism and long-term caution. The RSI at 80.77 and MACD histogram peaking suggest a pullback could be near. But with analyst upgrades and strong sales, the bulls have a cushion. My take? Ride the $951–$962.50 range today, but watch Friday’s expiry. If the $1,000 calls expire worthless, the stock could retest $941–$945. If not, the $1,000 target might feel less like a dream. Either way, the options market has already priced in extremes—now it’s up to the stock to deliver.