Costco (COST) Options Signal Bullish Bias: Whale Trades and $950 Call OI Highlight Upside Potential

• Costco’s lawsuit against Trump-era tariffs could reshape its cost structure if the Supreme Court rules in its favor by early 2026.
• A massive 80-lot block trade sold the COST20250926P942.5 put, hinting at bearish positioning ahead of key legal rulings.
• Institutional investors are piling into $950 calls expiring Dec 12, with 1,314 open contracts—nearly double the next strike’s volume.

Here’s the core insight: Costco’s options market is split between cautious bears eyeing a $800 floor and aggressive bulls targeting $950+—but technicals and whale activity lean decisively higher. Let’s break it down.Bullish OI at $950 vs Bearish Whales at $800: A Tale of Two Scenarios

Costco’s options chain tells a story of divided expectations. This Friday’s top OTM calls are clustered at $930–$950, with the $950 strike commanding 1,157 open contracts. That’s not just noise—it’s a liquidity magnet for traders expecting a post-earnings pop or a legal win. Meanwhile, puts are skewed wildly lower: the $800 strike has 2,136 open contracts, nearly four times the next put’s volume. Think of it like a seesaw—bulls are pushing hard on one end, but bears have dug in deep at the $800 level.

The block trade sold on the COST20250926P942.5 put (expiring Sept 26) adds intrigue. Selling puts at $942.5 suggests a bearish bet… but the strike is just 1% below today’s price. It’s a short-term play, not a long-term bet. Combine that with the $950 call frenzy, and you get a picture of traders hedging near-term risks while betting on a bigger rally.

Tariff Lawsuit: A Double-Edged Sword for Costco’s Price Action

Costco’s legal battle over Trump tariffs isn’t just a headline—it’s a wildcard. If the Supreme Court invalidates those tariffs, the company could see immediate cost savings on imported goods, boosting margins. That aligns with the bullish call buying we’re seeing. But here’s the catch: the ruling isn’t until early 2026, and the market could overreact in the short term if the court delays a decision. Retailers like Costco thrive on stable trade policies, so any uncertainty might keep volatility elevated.

Actionable Trade Ideas: Calls for the Bold, Puts for the Prudent

For options traders, the COST20251212C950 call (expiring Dec 12) is a standout. With 1,314 open contracts, it’s the most liquid OTM call available. If Costco breaks above its 30-day moving average ($917.90) and holds the Bollinger Band upper track ($942.88), this strike could pay off handsomely. A safer play? A COST20251212P870 put spread to hedge downside risk, given the $870–$880 support zone.

Stock traders should watch two levels: entry near $911.89 (30-day support) if the 200-day MA ($964.27) continues to act as resistance. A breakout above $942.88 (Bollinger Band upper) would validate the bullish case, with $965 as a first target. A breakdown below $905 (today’s intraday low) would force a reevaluation.

Volatility on the Horizon: Legal Drama and Earnings Loom

Costco’s options market is primed for a directional move—either from a legal win or a post-earnings pop. The Supreme Court hearing in Nov 2025 and Q1 2026 earnings (likely late Dec 2025) are catalysts to watch. For now, the $950 call OI and whale activity suggest bulls are ready to pounce. But don’t ignore the $800 put pile—it’s a reminder that a sharp selloff isn’t out of the question. Stay nimble, and let the data guide your next move.