Costco (COST) Options Signal Bullish Bias: Key Strike Levels and Trading Strategies for Q4 2025

• Options activity shows heavy call open interest at $965 and $970, while puts dominate at $900.
• Technical indicators hint at a short-term bullish trend but long-term bearish pressure.
• Jim Cramer’s bullish take and new retail partnerships could fuel near-term optimism.

Here’s the deal: Costco’s options market is buzzing with a clear message. Traders are betting on a potential upside breakout, but there’s a catch. Let’s break down what the data says and how to position for it.

What the Options Chain Reveals About Market Sentiment

The options market isn’t just numbers—it’s a conversation between bulls and bears. Right now, the conversation is leaning bullish. For Friday’s expirations, call open interest peaks at $965 (OI: 1,091) and $970 (OI: 784), while puts dominate at $900 (OI: 1,241). This suggests a tug-of-war: bulls are hedging for a rally, but bears are bracing for a drop below $900.

The put/call ratio of 0.906 (based on open interest) adds nuance. It’s slightly bearish, but not extreme. The real story is in the block trade: a whale sold 80 puts at $942.50 (COST20250926P942.5) for $984,000. That’s a bearish signal, but only if the stock tanks below $942.50. For now, the market seems split—bulls are optimistic, but bears aren’t backing down.

Company News: Strategic Moves and Contradictions

Costco’s recent headlines are a mixed bag. On the positive side, partnerships with NEXE Innovations and COVE SODA signal its role as a launchpad for niche products. Jim Cramer’s repeated endorsements ("best buy in the industry") and supply chain cost-cutting efforts also bolster confidence. But there’s a dark cloud: a product safety warning and the abortion pill decision could dent trust.

The key takeaway? Investor sentiment is polarized. Retailers love Costco’s membership model, but consumer trust is fragile. If the product issue blows up, the $900 put strike could see a rush. Conversely, if the news fades, the $965 call strike might get a boost from Cramer’s crowd.

Actionable Trading Strategies for Q4 2025

Let’s get practical. If you’re bullish but cautious, buy the $965 call (Friday expiration). It’s the most liquid OTM call and sits just below the 30D moving average ($928.94). A breakout above $945.28 (today’s high) could trigger a rally toward $965. For a bearish bet, sell the $900 put (Friday expiration). The block trade at $942.50 suggests a floor near $940, so the $900 strike feels overpriced unless the stock collapses.

For stock traders, consider entry near $910.94 (30D support). If it holds, target $932.30 (middle Bollinger Band) as a first profit zone. A break above $945.28 could push toward $955.88 (upper Bollinger Band). But watch the 200D MA at $972.63—it’s a tough ceiling.

Volatility on the Horizon

Costco’s story isn’t just about options—it’s about balance. The stock is caught between short-term optimism (calls at $965) and long-term skepticism (200D MA bearish). The block trade at $942.50 adds a wildcard: if the stock dips below $940, that put could force a rebound.

Here’s the bottom line: position for a rally but hedge against the downside. The $965 call and $900 put are your best bets for Friday. For next Friday, eye the $980 call (OI: 769) as a longer-term play. And don’t ignore the news—those product risks could turn this into a binary event.

In the end, Costco’s options market is a chess game. Play it smart, and you might just outmaneuver the bears.

{}