Costco’s Options Imbalance and $960 Call OI Signal Bullish Breakout Potential – Here’s How to Position

• Costco (COST) surges 1.19% to $948.70, breaking above 30D support at $943.98
• Options data shows 944 open calls at $960 (Friday expiry) vs 981 puts at $870
• Block trade sells 80 puts at $942.50 ahead of 2025-09-26 expiry

Here’s the big picture: Costco’s options market is screaming bullish while technicals hint at a short-term breakout. With calls at $960 and $1000 dominating open interest and puts clustered below $900, traders are clearly pricing in a rally. But the long-term MACD divergence warns of caution—let’s unpack what this means for your portfolio.

The $960 Call OI and $870 Put Battle: A Tale of Two Sentiments

Let’s start with the numbers. The top call strike at $960 has 944 open contracts expiring Friday, while the $1000 call trails closely with 907. That’s not just noise—it’s a vote of confidence. Meanwhile, puts are concentrated at $870 (981 OI) and $900 (757 OI), suggesting some hedging activity for a potential pullback.

The 0.92 put/call ratio (based on open interest) isn’t extreme, but it’s skewed slightly bearish. However, the block trade selling 80 puts at $942.50 (strike just below current price) adds intrigue. This could signal institutional players betting Costco won’t fall below $942.50 before September 2025—a level that aligns with the 30D support zone (942.84–943.98).

Company News: Earnings Momentum vs. Policy Headwinds

Costco’s Q4 results were a beast: $84.4B in sales, 13.5% e-commerce growth, and $5.87/share earnings. Analysts are high-fiving with a $1,065.28 price target. But the abortion pill policy shift could create friction. While conservative groups cheer, critics worry about brand damage.

The membership fee hikes and 35 new warehouse plans for 2026 are solid tailwinds. Yet the 200D MA at $972.47 looms as a psychological hurdle. If Costco can’t break above that, the long-term bearish MACD (-2.31) might take over.

Actionable Trade Ideas: Calls for the Breakout, Puts for the Safety Net

For the bullish case: Buy the COST250927C960 call (Friday expiry) at $948.70. If Costco closes above $960, this could pay off 20-30% in a day. Stop-loss at $942.50 (block trade level) protects against a surprise drop.

For the bearish hedge: Buy the COST250927P900 put (Friday expiry) at $948.70. This gives downside protection if the policy controversy flares up. Target a $900 close to trigger a 50%+ return.

Stock traders: Consider entries near $943.98 (30D support) if the price holds. A break above $955.90 (Bollinger Upper Band) would validate the bullish case. Exit targets: $970 (next resistance) or $972.47 (200D MA).

Volatility on the Horizon: Balancing Bullish Momentum and Bearish Risks

The RSI at 58.55 isn’t overbought yet, but the MACD histogram’s positive divergence suggests momentum is building. However, the 200D MA crossover (963.82 vs 972.47) warns of long-term headwinds.

Here’s the play: Use the $960 call as your main bet, but keep a small position in the $900 put as insurance. If Costco’s membership growth and e-commerce tailwinds continue, the $1,000 call (next Friday expiry) could be a moonshot. But watch the 200D MA like a hawk—this is where the long-term bears will pounce.

Bottom line: Costco’s options market is pricing in a short-term rally, but the long-term chart tells a different story. Play it smart—capitalize on the bullish setup while hedging against the 200D MA bear trap. The next 72 hours could be pivotal.