Costco's Options Signal a Bullish Battle at $950: How Traders Can Position for a Breakout or Defense

• Costco (COST) trades at $936.61, up 0.92% with volume surging to 1.13M shares.
• Options data shows heavy call open interest at $950 and $965, while puts dominate at $900 and $890.
• A $942.5 put block trade hints at institutional defense near key support levels.
• Insider sales and new store openings create a tug-of-war between bearish sentiment and expansion optimism.

Here’s the core insight: options market positioning and technicals suggest a high-stakes battle near $950. While short-term indicators lean bearish, the call/put imbalance and block trades imply a potential breakout scenario. Let’s break down why this could be a pivotal moment for traders.

The Options Imbalance: A Bullish Setup with Bearish Risks

The options chain tells a story of divided expectations. For Friday expiration, calls at $950 (OI: 898) and $965 (OI: 1054) dominate, while puts at $900 (OI: 1269) and $890 (OI: 1009) show heavy bearish positioning. This creates a tug-of-war: bulls are hedging a $950+ move, while bears are betting on a drop below $900.

The put/call ratio of 0.90 (favoring calls) adds nuance. It suggests a slight bullish tilt in open interest, but the heavy put volume at $900 warns of a potential trap. If the stock dips below $931 (middle Bollinger Band), those puts could accelerate the slide.

A notable block trade—COST20250926P942.5 (sell put, 80 contracts)—adds intrigue. This $942.5 strike aligns with the 200D support range (942.77–946.49). Selling puts here implies some big players are defending that level, possibly to limit downside risk ahead of earnings or news.

News vs. Options: Expansion Optimism vs. Insider Caution

Costco’s new store openings in November 2025 (U.S. and France) should theoretically boost revenue. Yet insider sales—like Tiffany Barbre’s 19.38% position reduction—hint at skepticism. The market is pricing in growth but hedging against near-term profit-taking by insiders.

This creates a paradox: options buyers are betting on a $950+ rebound, while insiders are cashing in. The key question is whether the expansion narrative can outweigh short-term profit-taking. If the stock holds above $931 (middle Bollinger Band), the new stores could drive a rally. But if it breaks below $911 (30D support), the bearish puts at $900 will likely dominate.

Actionable Trade Ideas: Calls for Breakouts, Puts for Defense

For options traders, the most compelling setups are:

• Bullish: Buy $950 calls (Friday expiration) if COST breaks above $937.86 (intraday high). Target $965–$975, where heavy call OI exists. Stop-loss below $931.
• Bearish: Buy $900 puts (Friday expiration) if the stock dips below $931. Target $900–$890, where heavy put OI could accelerate the move. Stop-loss above $937.86.

For stock traders, consider:

• Entry near $911 (30D support) if the stock bounces. Target $950–$965, with a stop below $900.
• Shorting near $965 if the stock fails to hold above $950. Target $931–$911, with a stop above $975.

Volatility on the Horizon: Navigating Costco’s Crossroads

The coming weeks will test Costco’s resolve. The $950 level is critical—it’s where heavy call OI, the 30D moving average, and expansion optimism converge. If bulls win, the stock could surge toward $975. But a breakdown below $931 would validate the bearish RSI (42.47) and MACD (-4.89) signals.

Traders should watch for a breakout above $937.86 or a breakdown below $911. Either move would align options positioning with technicals, creating a clear path for profit. For now, the market is in a holding pattern—waiting for Costco to choose its direction.